JGI Scheme – Understanding the Job Growth Incentive
COVID-19’s impact on the Singapore workforce has been significant, as seen in the surges in unemployment as companies cope under the constraints of the pandemic. Recognizing such a severe issue, the Ministry of Manpower (MOM) introduced the Job Growth Incentive (JGI) last September to spur local employment in local companies. Whilst initially planned to continue up till September 2021, the Government recently announced the extension of its qualifying window by six months on Friday (Sept 24 2021) in hopes of further encouraging local employment as the economy begins to recover. However, such governmental support would reduce from previous levels in line with the slightly improving market.
What is the JGI Scheme?
According to the Inland Revenue Authority of Singapore (IRAS), the JGI scheme aims to support companies expanding their local workforce into developing quality and sustainable jobs for locals. (In Singapore, ‘locals’ is defined as Singaporeans and Permanent Residents.) The Singapore government hopes that providing wage support would incentivise companies to increase their workforce and spur the economy. In March 2021, we provided an article covering the first two phases of the JGI scheme. As we enter the third phase of the JGI scheme in October 2021, here is our latest article to help companies highlight the notable differences in the wage support given to eligible companies:
- For each local hire under 40 years old, companies will receive 15% wage support of the first S$5000 of the employee’s salary up to 6 months. Such support is capped at S$4,500 per employee.
- For each local hire above 40 years old or who have disabilities or who are ex-offenders, companies will receive wage support of 50% wage support of the first S$6000 for the employee’s salary for up to 12 months. Such support is capped at S$36,000 per employee.
Refer to the table below by IRAS for more information about the eligibility criteria, the wage support structure, and its qualifying window.
Infographic Source: Inland Revenue Authority of Singapore (IRAS)
Further eligibility conditions:
On top of having increased the overall local workforce and the number of employees earning gross wages of at least $1,400 a month, there are other conditions IRAS highlights which include:
- Employers who have made mandatory and timely CPF contributions AND
- Companies that have been established on or before Sep 23, 2021
Eligible companies will be notified by IRAS and are automatically included in this scheme by post. Hence, they would not need to apply for it. You may log into myTaxPortal to obtain an electronic copy of your notice.
Click here to understand more about your company’s eligibility.
When will companies receive payouts for the third phase?
According to IRAS, companies will receive payouts in their bank accounts from March 2022. See Payout Table here. These pay-outs would be titled ‘Job Growth Incentive’ (GIRO) or ‘GOVT’ (PayNow Corporate).
Making the most out of the JGI scheme
With the immense support from the Government, employers should feel more at ease continuing or even accelerating their growth plans. Governmental efforts through this scheme have reaped significant workforce benefits as seen by the 400,000 local hires in 58,000 firms as of May 2021 in its first 2 phases. With such successes, employers should embrace more local hires and capitalize on the scheme’s benefits to spur long-run financial returns!
Hence, we urge you to strike while the barrel is hot (up till March 2022) as you can enjoy the support given by the Singapore Government. Contact us to support you in your hiring needs, and take this opportunity to expand your teams!
For more information, visit the IRAS website and click here to access a user guide produced by IRAS detailing the necessary steps individuals or employers can take. You can also check out Jobs Growth Incentive – Do You Know How It Works? which explains to you in detail how this scheme actually works.