Singapore Budget 2026 reinforced the role of training grants for employers in shaping workforce growth. The signal was clear. Companies that invest in skills will receive stronger support. Yet many employers still hesitate. If you plan to upskill your team this year, what support does your company qualify for? Are you using just one scheme when several may apply?
Singapore offers multiple layers of support for employer training. The structure is not always obvious. That is where many businesses lose value.
This guide breaks down the main training grants for employers and shows how each one fits into your workforce strategy.
Quick Takeaways
- SSG subsidies reduce upfront course fees for Singapore Citizens and Permanent Residents.
- IBF funding supports financial institutions with structured course fee caps per participant.
- SFEC offsets remaining employer costs, moving to a digital wallet model in 2026.
- Absentee Payroll funding reimburses salary costs during SSG-funded training hours.
- EIS tax deductions, cash payouts, and GST claims further reduce net training expenditure.
Table of contents
- Quick Takeaways
- Why Training Grants Matter for Employers
- SkillsFuture Singapore (SSG) Subsidy
- IBF Standards Training Scheme (IBF-STS)
- SkillsFuture Enterprise Credit (SFEC)
- Absentee Payroll (AP) Funding
- Enterprise Innovation Scheme (EIS)
- Claiming GST on Training Expenses
- How to Combine Training Grants Strategically
- FAQs About Training Grants for Employers
- Make Your Training Budget Work Harder
Why Training Grants Matter for Employers
Most business leaders agree that skills matter. Fewer act on it.
A 2026 report found that only 26% of business leaders have sent staff for relevant training in the past two years. Around 27% of companies do not plan to invest in training soon. At the same time, the Randstad Singapore Report states that 37% of Singaporean workers rank opportunities for growth, promotion, and development as a primary motivator at work.
That gap creates risk. AI tools reshape job roles. Data literacy affects decision-making. Cybersecurity threats continue to grow. When teams do not upgrade their capabilities, the cost appears later in slower execution, missed opportunities, or avoidable mistakes.
You face a strategic choice. Do you treat training as a discretionary expense? Or do you treat it as a lever for productivity and resilience?
The next sections show how Singapore’s training support framework lowers the barrier for employers who choose to act.
SkillsFuture Singapore (SSG) Subsidy
This is the starting point for most employer-sponsored training.
If you enrol your employee in an SSG-funded course, the subsidy applies upfront. You pay the net fee directly to the training provider. No separate reimbursement process for course fees is required in most cases.
Funding levels depend on whether your company qualifies as an SME.
| Employer Type | Course Fee Subsidy | Key Conditions |
| Non-SME | Up to 70% | Employee must be SC, PR or LTVP+ |
| SME (ETSS) | Up to 90%, depending on course type | Meet SME criteria below |
Who Qualifies as an SME
Your company must:
- Be registered or incorporated in Singapore
- Have at least 30% local shareholding
- Have annual sales turnover not exceeding $100 million, or no more than 200 employees
If you meet these criteria, you automatically fall under Enhanced Training Support for SMEs. ETSS is not a separate grant. It is the SME tier of SSG funding.
For many SMEs, this first layer already removes most of the training cost.
An SSG-approved training provider must deliver courses to qualify under this structure.
IBF Standards Training Scheme (IBF-STS)
If you operate in financial services, your course fee support may be covered by IBF rather than standard SSG funding.
This scheme applies to MAS-regulated financial institutions and accredited programmes aligned to the Skills Framework for Financial Services.
Funding levels are structured as follows:
| Participant Type | Funding Level | Cap Per Course |
| Singapore Citizen or PR | 50% | $3,000 |
| Singapore Citizen aged 40+ | 70% | $3,000 |
Funding support is granted once per calendar year per course per participant.If you manage compliance, risk, digital banking, or financial advisory teams, IBF-STS funding serves as your primary course fee subsidy layer before applying employer-level credits discussed later.
SkillsFuture Enterprise Credit (SFEC)
After course fee subsidies, SFEC reduces your company’s remaining out-of-pocket cost. It offsets up to 90% of qualifying expenses, capped at $10,000 per business.
Current SFEC Scheme (before the second half of 2026)
Under the current model, eligible companies can receive up to $10,000 in credit on a reimbursement.
To qualify, your company must:
- Have contributed at least $750 in Skills Development Levy during the qualifying period
- Have employed at least three local employees during that period
- Not be suspended or debarred from government funding
You pay the net training cost first, then claim reimbursement.
The current SFEC scheme will expire when the redesigned credit launches in the second half of 2026. Any unused balance must be utilised before that transition.
Redesigned SFEC (from the second half of 2026)
From the second half of 2026, SFEC will move to a digital wallet model.
All companies with at least three resident employees at the time of issuance will receive a fresh $10,000 credit. No application is required for issuance.
The major shift is how the credit is used.
| Feature | Current Model | Redesigned Model (2H 2026) |
| Credit Amount | Up to $10,000 | Fresh $10,000 |
| Usage | Reimbursement after payment | Immediate offset via digital wallet |
| Application | Claim required | No application for issuance |
| Expiry | 30 June 2026 | Details to be released in the latter part of 2026 |
Under the redesigned model, employers can offset qualifying expenses immediately instead of paying first and waiting for reimbursement.
For companies planning training across 2025 and 2026, timing matters.
Absentee Payroll (AP) Funding
Absentee Payroll offsets part of your employees’ salaries when they attend training during working hours.
Funding details:
- $4.50 per attended training hour
- Cap of $100,000 per organisation per calendar year
- Applies to SSG-funded courses
To qualify:
- Your organisation must be registered in Singapore
- The employee must be fully sponsored
- You must make CPF contributions for the employee
- The employee must complete the course before claim submission
Once approved, funding is disbursed to your corporate PayNow account. Processing typically takes around 2.5 weeks after submission.
For employers sending multiple staff for multi-day programmes, AP reduces the indirect cost of releasing employees for training.
Enterprise Innovation Scheme (EIS)
After subsidies and employer credits, the Enterprise Innovation Scheme provides tax-based support for training and capability development.
EIS allows businesses to claim enhanced tax deductions or convert part of their qualifying expenditure into a cash payout. As announced in Budget 2026, to support AI in the workforce, the scheme will also expand to include qualifying AI expenditures.
Here’s how the scheme works:
| Activity Type | 400% Tax Deduction Cap | Cash Payout Option | Cash Payout Cap |
| R&D, IP Registration, IPR Acquisition, SSG-Eligible Training | $400,000 per YA | 20% conversion allowed | $20,000 per YA (shared cap) |
| Innovation Projects with Polytechnics, ITE or Qualified Partners | $50,000 per YA | 20% conversion allowed | $20,000 per YA (shared cap) |
| [NEW] Qualifying AI Expenditure (YA 2027–2028) | $50,000 per YA | Not available | Not applicable |
400% Tax Deduction
If your company is profitable, the 400% deduction reduces taxable income.
How it works:
- $100,000 of qualifying expenditure can translate into $400,000 in deductible expense
- Subject to the relevant activity cap
- Applies to training programmes, R&D initiatives, IP activities, and qualifying projects.
This structure benefits companies investing heavily in workforce development or digital capability building.
Cash Payout Option
Instead of claiming tax deductions, eligible businesses may convert qualifying expenditure into a non-taxable cash payout.
Key details:
- Convert up to $100,000 of total qualifying expenditure
- 20% conversion rate
- Capped at $20,000 per Year of Assessment
- The cap applies across all qualifying activities combined
Important:
- You cannot claim both 400% deduction and a cash payout on the same expenditure.
- The election is final once submitted.
For companies with lower taxable income, the cash payout may offer immediate value. For profitable companies, the enhanced deduction often provides a stronger long-term impact.
Claiming GST on Training Expenses
If your company is GST-registered, you may claim input tax on training expenses.
To qualify:
- Hold a valid tax invoice addressed to your company
- Ensure the training is for business purposes
- Confirm the supplier is GST-registered
- Exclude disallowed claims
GST is claimed in your regular GST return based on the invoice date.
Example: You enrol your employees in a corporate Generative AI training priced at $1,798.50, inclusive of 9% GST.
- Course fee before GST: $1,650
- GST component: $148.50
If your company is GST-registered, you may claim back $148.50 per employee as input tax.
That reduces your effective cost, on top of any course subsidies, employer credits, or tax deductions already applied.
Is your team AI-ready?
Take our free AI Readiness Quiz and find out within minutes!
TEAM AI-READINESS QUIZ
Take this quick 3-minute quiz to find out how prepared your team is for AI.
How to Combine Training Grants Strategically
Training support works in layers. Applying them in the correct order prevents double-counting and ensures compliance.
A typical sequence looks like this:
- Apply SSG or IBF course fee subsidy
- Apply SFEC to reduce the remaining company portion
- Claim Absentee Payroll to offset salary costs
- Apply EIS for tax deduction or cash payout
- Claim GST input tax if registered
Example Scenario
You own an SME and sponsor 20 Singaporean employees to attend Vertical Institute’s 21-hour Generative AI corporate training priced at $1,650 per employee (excluding GST).
Below is the breakdown per employee using the EIS 20% cash payout option.
| Fee/Subsidy Particulars | Amount (Per Employee) |
| Original Course Fee | $1,650.00 |
| SSG Subsidy (70%) | -$1,155.00 |
| GST (9%) | $148.50 |
| Upfront Payable | $643.50 |
| SFEC (Up to 90%) | -$445.50 |
| Absentee Payroll ($4.50/hr) | -$94.50 |
| EIS (20% Cash Payout) | -$99.00 |
| GST Claim | -$148.50 |
| Total Rebatable | $787.50 |
Potential Surplus: $787.50 – $643.50 = $144.00
Now multiply the total surplus across 20 employees:
$144 × 20 = $2,880 potential surplus across 20 employees
The effective cost can look very different once you apply funding properly. The difference lies in planning.
Want to train your employees in AI
Get your workforce ready for the AI generation with structured training here!
Upskill Your Team Today
Empower your team with AI and workflow automation skills
Related Article: 10 Strategic Tips to Choose a Corporate Training Partner in Singapore
FAQs About Training Grants for Employers
What training grants can employers claim in Singapore?
Employers can claim SSG course fee subsidy, Enhanced Training Support for SMEs, IBF funding for financial institutions, SkillsFuture Enterprise Credit, Absentee Payroll funding, Enterprise Innovation Scheme benefits, and GST input tax claims where applicable.
Can SMEs combine SSG, SFEC and EIS?
Yes. These schemes apply in sequence. Course fee subsidies reduce upfront costs, SFEC offsets the remaining company portions, Absentee Payroll covers wage costs, and EIS applies at the tax stage. You cannot double-claim the same expenditure.
What changes in 2026 for SFEC?
From the second half of 2026, SFEC will shift to a digital wallet model. Eligible companies with at least 3 resident employees will receive a fresh $10,000 credit with immediate offset, rather than reimbursement.
How much can employers receive under Absentee Payroll?
Employers can receive $4.50 per attended training hour, capped at $100,000 per organisation per calendar year, provided CPF contributions are made and the employee completes the SSG-funded course.
Do foreign employees qualify for training grants?
Yes, in some cases. While SSG course fee subsidy and Absentee Payroll funding typically apply only to Singapore Citizens, Permanent Residents, or LTVP+ holders, employers can still use SFEC, EIS, and GST claims for eligible training expenses involving foreign employees.
How do I check if my company qualifies as an SME?
Your company must be registered in Singapore, have at least 30% local shareholding, and either have revenue not exceeding $100 million or no more than 200 employees. Meeting these criteria qualifies you under ETSS.
Can GST be claimed on training courses?
Yes, if your company is GST-registered and holds a valid tax invoice. The training must be for business purposes. GST is claimed through your regular GST return based on the invoice date.
Does IBF funding apply to non-financial companies?
No. IBF funding applies only to MAS-regulated financial institutions and accredited financial services programmes. Non-financial companies should refer to the SSG course fee subsidy instead.
Which training providers qualify for employer training grants?
Training providers must be recognised under the relevant scheme. For SSG subsidies and Absentee Payroll, the course must be approved and listed in the SkillsFuture Course Directory. Vertical Institute is both SSG- and IBF-approved, and our corporate programmes qualify for applicable employer funding.
Can employees use PSEA alongside employer training grants?
Employer training grants such as SSG, SFEC, and Absentee Payroll are claimed by the company, not the individual. PSEA and SkillsFuture Credit generally apply to fees paid personally. Connect with our admissions team to learn more. Vertical Institute covers this in depth in its PSEA Courses, with practical, project-based sessions.
Make Your Training Budget Work Harder
Training grants for employers work best when structured correctly. Singapore Budget 2026 reinforced stronger support, with the new SFEC wallet launching in the second half of 2026 and expanded EIS support for AI ahead.
Vertical Institute is an SSG-approved training provider, and our corporate training qualifies for relevant employer funding schemes.
Use our Business Subsidy Calculator to estimate your savings, and book a consultation to plan your training roadmap properly now!
How much can you save from training your employees at VI?
Use our Business Subsidy Calculator and find out your savings within minutes!
BUSINESS SUBSIDY CALCULATOR
Take this 5-minute questionnaire to get an instant breakdown of all eligible subsidies and course fee!
