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Singapore Budget 2026: Key highlights for HR leaders, employers, and employees

Steve Tyler Exec Content

Singapore Budget 2026: Key highlights for HR leaders, employers, and employees

Summary

Budget 2026, delivered by Prime Minister and Finance Minister Lawrence Wong, focuses on refreshing Singapore’s economic strategy amid rising global uncertainty. Key themes are: boosting competitiveness and internationalisation, harnessing AI, strengthening workforce resilience, supporting families and seniors, and safeguarding security and sustainability.

For HR leaders and employers, the Budget includes measures affecting manpower planning and payroll costs: higher qualifying salaries for Employment Pass and S Pass, a SkillsFuture–Workforce Singapore merger into a single statutory board, enhanced Progressive Wage Credit Scheme co-funding, CPF top-ups for older workers, and targeted training and reskilling support. There is also a 40% corporate income tax rebate for YA2026 to ease cashflow pressures for active companies.

Key Points

  1. Minimum qualifying salaries raised (from Jan 2027): Employment Pass to $6,000 ($6,600 for financial services); S Pass to $3,600 ($4,000 for financial services).
  2. SkillsFuture Singapore and Workforce Singapore to merge into a new statutory board overseen by Education and Manpower ministries — a one-stop hub for skills, career guidance and job matching.
  3. Progressive Wage Credit Scheme co-funding increased from 20% to 30% and extended to 2028; qualifying minimum wage increase raised from $100 to $200.
  4. CPF support: top-ups up to $1,500 for Singaporeans aged 50+ with balances below the Basic Retirement Sum; planned senior worker contribution rate rises proceed in 2027 with a CPF Transition Offset for employers.
  5. 40% corporate income tax rebate for Year of Assessment 2026 (minimum $1,500 for active companies with at least one local worker; cap $30,000) to ease short-term cashflow.
  6. AI elevated as a national priority: new AI missions (manufacturing, logistics, finance, healthcare), National AI Council chaired by the PM, regulatory sandboxes, AI Park at one-north and expanded tax/grant support for AI adoption.
  7. Support for families: Large Families Scheme (up to $16,000 for third+ child), higher preschool/student-care subsidies, wider means-tested preschool subsidies, and $500 CDC vouchers for all households in Jan 2027.
  8. Inflation relief: Cost-of-Living Special Payment ($200–$400) for eligible adults earning up to $100k; increased U-Save rebates for utilities.
  9. Green and security measures: carbon tax raised to $45/t (trajectory $50–$80/t by 2030), boosted defence and cyber spending, and accelerated energy diversification and solar target increase to 3 GWp.
  10. Internationalisation and finance: grant support for SMEs increased (up to 70%), higher automatic claim cap for Double Tax Deduction for Internationalisation, and measures to ease IPOs and link SGX with Shenzhen.

Content summary

The Budget balances immediate support with longer-term strategic investments. Immediate relief includes tax rebates and wage support; medium-term moves prioritise AI, R&D (RIE 2030 investment of $37bn), and stronger international ties to anchor high-value firms. Workforce measures combine stronger minimums for foreign worker frameworks with enhanced local wage and skills support to protect a ‘strong local core’ while staying open to global talent.

Context and relevance

Why this matters to HR: the pass salary increases, S Pass/EP adjustments and levy changes will affect hiring strategies, total cost of foreign talent and workforce mix. The SkillsFuture–WSG merger and expanded training allowances create simpler channels for upskilling and redeployment. CPF and wage support changes affect payroll planning for older workers and lower-wage cohorts. AI and productivity grants are relevant to HR-led transformation and workforce redesign plans.

Why should I read this?

Short answer: because this Budget changes the rules you hire and pay by, and gives you clearer routes for reskilling people — plus some quick cashflow relief for firms. If you manage headcount, pay budgets or training plans, the EP/S Pass lifts, PWCS changes, SkillsFuture/WSG merger and AI incentives all demand action from now on. We skimmed the long speech so you don’t have to — here’s the shortlist of what to watch and act on.

Source

Source: https://www.humanresourcesonline.net/singapore-budget-2026-key-highlights-for-hr-leaders-employers-and-employees