Singapore’s Budget 2025 was delivered on 18 February 2025. It continued to help businesses with costs while pushing for growth, innovation and the hiring of local and older workers. This article sets out the measures most relevant to SMEs, with Years of Assessment (YA) and effective dates where these were announced.
Corporate income tax rebate and cash grant (YA 2025)
- Rebate: 50% of corporate income tax payable for YA 2025.
- Cash grant: a minimum of $2,000 for companies that were active and made CPF contributions for at least one local (Singapore Citizen or PR) employee in calendar year 2024. Shareholders who are also directors do not count towards this.
- Cap: the rebate and cash grant together are limited to $40,000 per company.
- Timing: eligible companies received the benefits automatically from 2Q 2025.
For example, a company with $30,000 of tax payable and local employees in 2024 receives a $2,000 cash grant and a $13,000 rebate, which is $15,000 in total.
Other tax changes for businesses
- Innovation cost-sharing: companies can deduct 100% of payments made under an approved cost-sharing arrangement for innovation work that does not meet the definition of R&D, from 19 February 2025.
- Employee equity remuneration: from YA 2026, a company can deduct payments it makes to its holding company, or to a special purpose vehicle, for new holding company shares issued to its employees.
- Land Intensification Allowance: extended to 31 December 2030. From 1 January 2026, the shareholding test for related users is relaxed from at least 75% to more than 50%.
- Double Tax Deduction for Internationalisation and the M&A scheme: both extended to 31 December 2030.
Enterprise support
- Enterprise Financing Scheme (EFS): the maximum Trade Loan rises permanently from $5 million to $10 million. From 1 April 2025 to 31 March 2030, the EFS M&A Loan can also be used to buy targeted assets.
- SkillsFuture Enterprise Credit (SFEC): redesigned as a $10,000 credit for companies with at least three resident employees. Companies can use the credit directly instead of only claiming it back as a reimbursement.
- Market Readiness Assistance grant: the higher cap of $100,000 per new market is extended to 31 March 2026.
- Funding top-ups: the National Productivity Fund receives $3 billion, supporting investment incentives including the Refundable Investment Credit. A $1 billion Private Credit Growth Fund is set up for high-growth local companies.
Employment and CPF measures
- Progressive Wage Credit Scheme (PWCS): co-funding for qualifying wage increases is raised:
- increases given in 2025: from 30% to 40%, paid in 1Q 2026;
- increases given in 2026: from 15% to 20%, paid in 1Q 2027.
Employees must earn an average gross monthly wage of up to $3,000 before the increase and up to $4,000 after it, and the increase must be at least $100 a month.
- CPF for senior workers: from 1 January 2026, total CPF contribution rates rise by 1.5 percentage points:
- employees aged above 55 to 60: employer rate 16%, employee rate 18% (total 34%);
- employees aged above 60 to 65: employer rate 12.5% (total 25%).
- CPF Transition Offset: for 2026, the Government covers half of the increase in employer contributions (0.25 percentage points of wages), paid automatically.
- Senior Employment Credit: extended to 31 December 2026 for Singaporean workers aged 60 and above earning less than $4,000 a month. Employers receive up to 2% of wages for workers aged 60–64, up to 4% for ages 65–68 and up to 7% from age 69.
- Uplifting Employment Credit: extended to 31 December 2028. It offsets up to 20% of wages for the first nine months, capped at $600 a month per eligible employee.
GST and stamp duty
Budget 2025 did not change the GST rate or introduce general stamp duty changes for businesses. GST remission for certain S-REITs and registered business trusts was extended to 31 December 2030. If you are planning a transaction, check the IRAS website for the latest position.
Household measures relevant to employers
From January 2026, the new Matched MediSave Scheme matches voluntary MediSave top-ups for some members aged 55 to 70, up to $1,000 a year. It creates no obligation for employers, but older staff may ask about it alongside the CPF rate changes above.
What this means for your financial statements
Consider the recognition, measurement and disclosure of:
- CIT rebates and cash grants;
- wage-support payouts such as PWCS, the Senior Employment Credit and the Uplifting Employment Credit;
- CPF Transition Offset receipts.
Payroll costs for older employees also rise from 2026, which should be reflected in budgets and forecasts.
How we can help
If you have questions about how these Budget 2025 measures affect your company’s audit or financial statements, please contact K.S. NG & Co at enquiries@ksng.com.sg.
Information in this article is correct as at October 2026.