Key Highlights of Budget 2025 Impacting HR and Organizations

In this month’s newsletter, we bring you the latest updates on Budget 2025. We cover key developments affecting HR and organizations, along with upcoming changes to S Pass eligibility and the Work Permit framework.

Additionally, we share insights from a recent survey conducted by the Singapore University of Social Sciences (SUSS) and the Singapore National Employers Federation (SNEF) on employers’ perspectives regarding the Tripartite Guidelines for Flexible Work Arrangement Requests.

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Budget 2025: Key Highlights for Human Resources and Organizations

1. Workforce Transformation Support

(a) Encouraging Lifelong Learning

SkillsFuture Level-Up Programme

• NEW: $300 monthly training allowance for Singaporeans aged 40 and above (from early 2026)
• Applies to selected part-time courses

Workfare Skills Support Enhancement (from early 2025)

• Monthly allowance for lower-wage workers aged 30 and above, for selected part-time and full-time courses.
• The scheme provides employers with absentee payroll support when they sponsor workers for training.

Support for students & lifelong learners

• Development of a new city campus for SUSS to promote continuous learning to support learners of all ages.
• Extension of Singapore Universities Trust until 31 March 2042, for fundraising efforts for SUSS & Singapore Institute of Technology

(b) Redesigned SkillsFuture Enterprise Credit (from 2nd half 2026)

• Firms with at least 3 resident workers are eligible for $10,000 in credit. They are able to immediately offset out-of-pocket costs for eligible workforce transformation initiatives and courses, rather than do so on a reimbursement basis.
• Credits last for 3 years.

(c) NTUC Company Training Committee (CTC) Grant

• Additional $200 million committed to support more companies.
• Aims to drive business transformation and upskill workers.
• Expand the CTC grant to support employer-led training that leads to formal qualifications or certifications.

(d) SkillsFuture Workforce Development Grant

• Up to 70% funding support for job redesign initiatives.

2. Inclusive Hiring

(a) Support for Hiring Seniors

Senior Employment Credit (Extended to 2026)

• Wage offsets for employers who hire Singaporean seniors aged 60 and above and earning less than $4,000 a month.
• Highest SEC wage support tier age raised from 68 to 69 to align with re-employment age increase.
• Companies will receive 7% wage reimbursement for hiring workers aged 69 and above.

CPF Transition Offset (2026)

• Covers 50% of the increase in employer CPF contributions for senior workers aged above 55 to 65.

(b) Support for Hiring Ex-Offenders

Uplifting Employment Credit (Extended to 2028)

• Providing wage offsets for employers hiring ex-offenders.

(c) Support for Hiring PWDs

Enabling Employment Credit (Extended to 2028)

• Providing wage offsets for employers who hire PWDs.

3. Managing Business Cost

(a) Corporate Income Tax Rebate

• 50% corporate income tax rebate will be provided for the Year of Assessment 2025.
• Eligibility: Every active company that employed at least one local employee in 2024 will be provided a minimum benefit of $2,000
• Total Cap: $40,000

(b) Enhancement of Progressive Wage Credit Scheme

The government’s co-funding will increase funding levels for wage increase:

• From 30% in 2025 to 40% in 2026
• From 15% in 2026 to 20% in 2027

4. Enhancing Technology and Innovation Engines

(a) $3 billion top-up to the National Productivity Fund

(b) Invest $1 billion in the country’s R&D infrastructure

5. Strengthening the Enterprise Ecosystem

(a)  NEW Enterprise Compute Initiative

• A new $150 million fund will assist enterprises in leveraging artificial intelligence by partnering them with major cloud service providers, granting access to AI tools, computing power, and expert consultancy services.

(b)  $1 Billion Private Credit Growth Fund

• This will provide more financing options for high-growth local enterprises leadership.
• More details to be announced by Minister for trade and industry at the Committee of Supply

(c) Extend Support Schemes for Internationalisaion, as well as Mergers and Acquisitions

(d)  NEW Global Founder Program

• It is for experienced founders ready to launch their next big idea into a globally leading business from Singapore.
• Tailored program by EDB
• Applications will open from April 2025

(e)  Tax Incentive to support Singapore equities market

• Corporate income tax rebate for Singapore-based companies going public:

            – 20% rebate for primary listings.

            – 10% rebate for secondary listings.

• Rebates capped at:

             – $6 million/year for companies with market cap ≥ $1 billion.

             – $3 million/year for companies with market cap < $1 billion.

• Companies must remain listed for five years.
• Scheme valid till 31 December 2027.

6. Investing in Infrastructure

(a) $5 billion top-up to Changi Airport Development Fund

(b) $5 billion top-up to the Future Energy Fund.

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Upcoming Changes to S Pass Eligibility and Work Permit Regulations

It has been announced on 6 March 2025 (Thursday), during the Committee of Supply (COS) speech, that there will be upcoming changes to S Pass qualifying salary, S Pass levy rates, as well as changes to Work Permit Regulations. 

Upcoming Changes to S Pass Eligibility

1. Revised Minimum Qualifying Salaries.

The new S Pass qualifying salary will take effect:

• For renewal applications: From 1 September 2026

• For new applications: From 1 September 2025

The minimum qualifying salary for S Pass applications will be raised as follows. 

2. Increased S Pass Levy Rates.

From 1 September 2025, the S Pass Basic / Tier 1 levy rate will be increased from $550 and harmonised with the Tier 2 levy at $650.

Click here for more details of upcoming changes to S pass.

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Key Changes to Work Permit Regulations

1. Removal of Maximum Employment Period for Work Permit Holders.

• Effective 1 July 2025, the previous maximum employment period (ranging from 14 to 26 years based on sector, skill level, and country of origin) will be removed.
• This allows Work Permit holders to remain employed, provided they meet eligibility requirements and employer demand
• Note: This change does not apply to migrant domestic workers.

2. Increase in maximum employment age.

• The maximum employment age for Work Permit holders will be increased from 60 to 63 years. This aligns with the local retirement age. 
• The age limit for new Work Permit applicants will increase to 61 years (currently 50 for non-Malaysians and 58 for Malaysians).

3. Expansion of Non-Traditional Source Countries and Eligible Occupations.

• From 1 June 2025: Bhutan, Cambodia, and Laos will be added to the Non-Traditional Source (NTS) countries list 
• From 1 September 2025: The NTS Occupation List will expand to include:
  • Heavy vehicle drivers
  • Various manufacturing roles
  • Cooks across all cuisines

Source: https://www.mom.gov.sg/newsroom/speeches/2025/0306-minister-speech-for-cos-2025

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Survey Results: Employers’ Perspective on the Tripartite Guidelines on Flexible Work Arrangement Requests

A recent survey was conducted by the Singapore University of Social Sciences (SUSS) and the Singapore National Employers Federation (SNEF) across 10 industries and 367 firms to access employers’ perspective on the Tripartite Guidelines on Flexible Work Arrangement Requests.

Key Findings

• 81% of employers in Singapore are prepared to implement the Tripartite Guidelines on Flexible Work Arrangement Requests (TG-FWAR).
• 70% of companies already have processes in place to assess FWA requests.
• 22% of employers incorrectly think that they are required to approve all FWA requests after the TG-FWAR comes into effect.
• Employers anticipate increased demand for flexible work arrangements (FWAs), particularly among employees in their 20s to 40s seeking work-life balance.

Most Common FWAsAcross industries, flexi-time (77%) and flexi-place (70%) are more commonly practiced than flexi-load (26%).

Industries more likely to adopt flexi-load include Electronics & Precision Engineering, Finance, Hospitality & Tourism, and Information & Communications, with adoption rates exceeding 40%.

The average percentages reflect the proportion of employers offering the different types of FWA, where adoption of certain types of FWA within these industries may be predominately for back-end employees, rather than front-end employees.

Industry Variations in TG-FWAR Adoption

The report highlights varying levels of readiness across industries and company size. 

Firms in the Finance sector expressed greater confidence in their human resource and line managers’ ability to comply with the guidelines. In contrast, industries with more structured operational schedules, such as Maritime and General Manufacturing, reported lower confidence levels.

Larger firms (more than 100 employees) with more resources and structured processes, are better positioned to implement FWAs effectively, while smaller firms (less than 100 employees) require support to manage workload balancing and performance tracking.

When asked in September 2024, 70% of employers have a process for evaluating FWA requests.

FWA Requests: Who Do Employees Direct Their FWA Requests To?

 The majority of requests for FWA are made through managers, supervisors, or the HR department.

Managers and supervisors should then be empowered and trained to deal with FWA requests. Such training might involve familiarisation with company policies and how to evaluate requests fairly.

FWA Requests: How do Employers Evaluate Request? 

• Job Nature as Top Consideration (93%)
  Employers prioritize evaluating the nature of the job when reviewing FWA requests, considering factors like remote feasibility, required core hours, and workload distribution.
• Impact on Productivity (90%)
  Nearly all employers assess how FWAs affect productivity, team dynamics, and business goals, making it a key factor in decision-making.
   

Best Practices for Managing FWA Requests

1. Establish Clear Guidelines
   • Develop and communicate company policies on FWAs to ensure transparency.
   • Outline acceptable reasons and protocols for requesting FWAs.
2. Set Work Expectations
   • Define clear objectives and performance milestones to align employees and managers.
   • Ensure expectations are understood, especially for remote work.
3. Trial and Review FWAs
   • Implement trial periods to assess feasibility before full adoption.
   • Conduct regular reviews to gather feedback and make necessary adjustments.
   • Encourage open communication between employers and employees to find workable solutions.

Click here for full report

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Recruitment Agency Singapore

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