Singapore Income Tax: Are Your Jobs Support Scheme (JSS) or Job Growth Incentives (JGI) COVID-19-Related Payouts Taxable?

Viewed by 17,010 Smart Towkays

Mar 29, 2021

Tax season is upon us once more, with the deadline for filing income tax not far off on 18 April 2021 (note that for paper filing instead of e-filing, the deadline is 15 April 2021).

In light of the global COVID-19 outbreak, a series of support measures was introduced in 2020 to help businesses and individuals ease their cash flow, with many of them extended in 2021. These measures have come in the form of cash payouts, wage subsidies or grants, and there can be confusion about which of them will impact the tax we pay this year.

The Inland Revenue Authority of Singapore (IRAS) has released a guideline which explicitly covers the income tax treatment of COVID-19-related payouts to businesses and individuals. The information is as follows:

What Covid-19 Related Payouts are not taxable?

The following payouts are not taxable either because a specific exemption has been granted to exempt the payouts from tax or the payouts are not income in nature:

	Payout	Purpose of Payout	Tax Treatment of Payout
1	Self-Employed Person Income Relief Scheme payout	To help eligible self-employed persons (SEPs) tide over this period of economic uncertainty.	Not taxable as the payout is meant to support individuals through the exceptional circumstances arising from the COVID-19 pandemic.
2	COVID-19 Support Grant	To support individuals who have lost their jobs as a result of the COVID-19 pandemic, while they find a new job or attend training.
3	Workfare Special Payment (under Care and Support package)	To provide support to Singaporeans during this period of economic uncertainty.
4	Temporary Relief Fund payout	To support those who require immediate help to cope with basic living expenses as a result of the COVID-19 pandemic.
5	NTUC Care Fund (COVID-19) payout	To provide one-off financial assistance to National Trades Union Congress (NTUC) union members who are in financial difficulty or retrenched due to the COVID-19 pandemic.
6	Wage support for tourist guides licensed by the Singapore Tourism Board	To provide wage support for licensed tourist guides.
7	Payout to Singaporean seafarers funded by the Maritime and Port Authority of Singapore under the Seafarers Relief Package	To assist Singaporean seafarers who are unable to secure shipboard employment.
8	Jobs Support Scheme payout	To help enterprises retain local employees (Singapore Citizens and Permanent Residents) during this period of economic uncertainty.	Not taxable as the payout is to help employers retain their local employees by providing cashflow

COVID-19 Quarantine Order Allowance scheme payout

COVID-19 Leave-of Absence (LOA) scheme payout

COVID-19 Stay-Home Notice (SHN) scheme payout

To mitigate the financial impact for those who have been served, or whose workers have been served, a Quarantine Order, LOA or SHN.

support or mitigate the financial impact of COVID-19 containment measures for employers and SEPs.

Government cash grant (announced in Fortitude Budget)

To help support rental relief for Small and Medium Enterprises (SMEs) and specified Non- Profit Organisations (NPOs) tenant-occupiers of prescribed properties.

Not taxable as it is given to qualifying property owners (i.e. eligible SMEs/NPOs owner- occupiers, or owners with eligible SMEs/NPOs tenant-occupiers) to help support SMEs and specified NPOs occupiers of prescribed properties during the COVID-19 pandemic.

Courage Fund COVID- 19 Relief schemes

For more information on the schemes, please refer to NCSS.

To provide relief and support to low-income families, healthcare workers and other specified individuals who have supported the national response to COVID-19 and in doing so, contracted COVID- 19.

Not taxable as these are unconditional gifts.

What Covid-19 Related Payouts are taxable?

The following payouts are taxable, being revenue receipts of a business, in accordance with general income tax rules:

	Payout	Purpose of Payout	Tax Treatment of Payout
1	Temporary Housing Support for employers affected by Malaysia's Movement Control Order	To help employers defray the additional costs of providing short-term housing to affected workers.	Taxable as the payout received is to defray the operating costs of a business and is revenue in nature.
2	Senior Worker Support Package	To support employment of senior workers.
	- Senior Employment Credit - CPF Transition Offset Scheme
	- Senior Worker Early Adopter Grant
	- Part Time Reemployment Grant

3	Assistance scheme to defray third-party professional cleaning and disinfection costs for premises with confirmed COVID-19 cases	To provide assistance to defray cleaning costs for premises with confirmed COVID-19 cases.
4	Special relief for unhired taxis	To help taxi operators defray the costs of their unhired fleet of taxis.
5	Wage Credit Scheme (including the enhancements made as part of the Stabilisation and Support Package in Budget 2020)	To support wage increases for Singaporean workers.
6	Jobs Growth Incentive	To provide wage support to eligible employers with new local hires between Sep 2020 and Feb 2021.
7	Construction Restart Booster	To help construction firms defray costs in procuring additional materials/equipment to comply with COVID-Safe Worksite requirements.

In Summary, Jobs Support Scheme (JSS) which is to help employers to retain local employees by providing cash flow support is not taxable while Jobs Growth Incentive(JGI) which is to provide wage support for new local hires to defray the operating costs of a business is revenue in nature is taxable

Tax deductions on Work-From-Home expenses

While not strictly Covid-19-related, working from home has become a common practice due to the coronavirus, so a lesser-known tax deduction on WFH expenses has suddenly become important to know. You can read more about this here.

Remember to file them on time!

Failing to file income tax on time is a crime and you may be forced to pay a fine or even summoned to court. Failure to file your tax returns for two or more years can even result in imprisonment. Hopefully the information above will assist our Towkays in filing their taxes timely and without error.

For business related tax returns, the adoption of compatible payroll software for a company would go a long way in making the filing process as simple and fuss-free as possible. You can read our take on the best payroll software for Singapore SMEs as well.

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