Employment Assistance Payment in Singapore: When It Is Owed, How Much, and Tax and CPF Treatment

Short answer: An employer owes the Employment Assistance Payment when it cannot find a suitable job for an eligible employee reaching the retirement age of 64 and does not arrange re-employment with another employer. MOM’s tripartite guidelines set it at 3.5 months’ salary, between S$6,250 and S$14,750. It is not taxable and attracts no CPF.

The employment assistance payment is the sum a Singapore employer pays when the re-employment duty under the Retirement and Re-employment Act 1993 cannot be met. HR teams often get the details wrong: which salary to use, when the lower amount applies and how to treat it in payroll. This guide covers only the payment. For the wider change to a retirement age of 65 and a re-employment age of 70 from 1 January 2029, read our employer checklist for retirement age 65.

This article is general information only and is not legal, tax or immigration advice. For matters needing legal advice, we work with a panel of experienced Singapore law firms.

What is the employment assistance payment and where does the duty come from?

It is a one-off payment an employer makes to an eligible employee whom it cannot re-employ at the retirement age, to help the employee tide over while looking for another job. The duty comes from section 7C of the RRA, and the amount comes from MOM’s Tripartite Guidelines on the Re-employment of Older Employees.

Section 7A of the RRA requires re-employment of eligible employees from the retirement age, now 64, up to the re-employment age, now 69. Section 7C releases the employer from that duty only if it cannot find a suitable vacancy despite reasonable attempts made in line with the tripartite guidelines, and either:

• it offers the employee an employment assistance payment; or
• another employer offers to employ the employee instead and the employee accepts.

The statute does not fix a dollar figure. Section 7C(5) says the employer must take the tripartite guidelines into account when deciding the amount, and the guidelines then set out the recommended months of salary with a floor and a cap. MOM’s responsible re-employment page calls it a last resort.

When must an employer pay it, and when is nothing owed?

The payment is owed only to an eligible employee whom the employer is unable to re-employ and who is not transferred to another employer. If the employee is not eligible, or turns down a reasonable offer, no payment is owed.

MOM lists four eligibility conditions: the employee is a Singapore citizen or permanent resident; has served the current employer for at least two years before turning 64, where the employee was hired at age 55 or above; has satisfactory work performance as assessed by the employer; and is medically fit to continue working.

Situation	Is the EAP owed?	Source
Eligible employee, no suitable job found, no transfer arranged	Yes	RRA s 7C(1)(a); MOM re-employment page
Employer makes a reasonable re-employment offer and the employee declines	No	MOM FAQ
Employee tells the employer he or she does not wish to continue working on or after the specified age	No	RRA s 7C(3)
Employee does not meet the eligibility criteria	No, but the employer should tell the employee at least 3 months before retirement	MOM FAQ; guidelines para 15
Another employer offers re-employment and the employee declines it	Yes, from the present employer, unless both agree otherwise	Guidelines para 32; MOM FAQ
Full-time employee asks for part-time re-employment, employer can offer only full-time, employee declines	No	Guidelines Annex, FAQ 4
Employee is in an exempt group, such as someone working 20 hours a week or less, or on a fixed-term project contract	No re-employment duty, so no EAP	MOM FAQ on exemptions

To avoid disputes, the guidelines advise employers to get written confirmation from eligible employees who do not want to be re-employed.

How much is the employment assistance payment today?

The current recommended amounts are 3.5 months’ salary for the regular payment and 2 months’ salary for the stepped-down payment, each with a minimum and maximum. These figures come from the Tripartite Guidelines, updated on 1 July 2026, and match MOM’s re-employment page as at 6 November 2026.

Type	When it applies (employees aged 63 or below on 1 July 2026)	Months of salary	Minimum	Maximum
Regular EAP	Age on the day after employment ends: 64 to below 66.5	3.5	S$6,250	S$14,750
Stepped-down EAP	Age on the day after employment ends: 66.5 to below 69	2	S$4,000	S$8,500

The guidelines call this the “two equal halves” approach: the obligation shrinks in the second half of the five-year re-employment period, which for the main cohort starts 30 months after turning 64.

Employees who had already passed 63 on 1 July 2026 belong to transitional cohorts with longer re-employment periods, so their switch-over age is different. For those aged above 63 and up to 66 on that date, the regular payment applies from age 63 to below 66, and the stepped-down payment from 66 to below 69. For those aged above 66 and up to 68 on that date, the split is 62 to below 65.5, then 65.5 to below 69. The amounts and caps are the same for all cohorts.

Three further rules apply. Near the re-employment age, the payment should not exceed the salary payable for the rest of the period up to that age. For part-time staff, the limits can be pro-rated by weekly hours against a full-time employee. Employers with a higher contractual retirement or re-employment age apply the same two-halves approach.

Which salary do you use to calculate the payment?

Use the employee’s gross rate of pay as defined in the Employment Act 1968. Footnote 10 of the Tripartite Guidelines says this.

Section 2 of the Employment Act defines gross rate of pay as the total money, including allowances, the employee is entitled to under the contract for working a set period, such as a month. It leaves out:

• overtime payments;
• bonus payments and annual wage supplements;
• reimbursement of special expenses incurred in the course of employment;
• productivity incentive payments; and
• travelling, food or housing allowances.

So a fixed shift allowance counts, but a housing allowance or bonus does not. The guidelines peg the payment to the employee’s salary at the time the payment is offered, so a pay adjustment made at an earlier re-employment carries through. There is one exception. Where re-employment was transferred to a new employer and the new salary is lower, the guidelines ask the new employer to peg the payment to the previous job’s salary for the first three months of re-employment, and to state that amount in the consent form.

How do you work out the payment? A worked example

Multiply the monthly gross rate of pay by 3.5 or 2, then raise the result to the minimum or cut it to the maximum. The examples assume main-cohort employees (aged 63 or below on 1 July 2026).

Example: Madam Tan turns 64 in September 2027. Her basic salary is S$3,500 a month, she receives a fixed shift allowance of S$300 and a travelling allowance of S$200, and she was paid a S$4,000 bonus last year. After reviewing every department, her employer has no suitable vacancy and no other employer will take over the obligation.

1. Work out the gross rate of pay: S$3,500 basic plus S$300 shift allowance equals S$3,800. Leave out the travelling allowance and the bonus.
2. Pick the multiplier from her age on the day after employment ends. She is 64, so the regular 3.5 months applies.
3. Multiply: S$3,800 x 3.5 = S$13,300.
4. Apply the floor and cap. S$13,300 is between S$6,250 and S$14,750, so it stands.
5. Pay S$13,300 by her last day of employment, or on agreed instalments, and record it outside the CPF wage fields.

Employee	Gross rate of pay	Type	Raw amount	EAP payable
Madam Tan, age 64	S$3,800	Regular (3.5)	S$13,300	S$13,300
Mr Lim, age 64, senior manager	S$7,000	Regular (3.5)	S$24,500	S$14,750 (cap)
Mr Ravi, age 64, cleaner	S$1,600	Regular (3.5)	S$5,600	S$6,250 (minimum)
Ms Wong, re-employed, contract not renewed at age 67	S$3,000	Stepped-down (2)	S$6,000	S$6,000
Mr Ong, age 64, part-time at 22 hours against 44 full-time	S$1,500	Regular (3.5), limits halved to S$3,125 and S$7,375	S$5,250	S$5,250

The part-time line halves the limits because 22 hours is half of 44. Our free tools page has calculators for related payroll sums.

Is the employment assistance payment taxable or subject to CPF?

No to both. MOM states that the employment assistance payment is not considered income, is not taxable and is not liable for CPF contributions.

IRAS takes the same view. Its tax treatment of other payments summary table lists “Employment Assistance Payment” as not taxable. IRAS explains that the payment is made because the employer cannot find a suitable position for the employee. That page still cites the older ages of 63 and 68.

Be careful with other money paid in the same exit package. Salary up to the last day, encashed leave and any ex-gratia sum are separate items, and IRAS treats several of them differently from the EAP. Our guide on whether retrenchment benefits are taxable sets out IRAS’s position payment by payment. Keep the EAP on its own payroll line so it is not treated as CPF wages. For CPF on the employee’s final ordinary wages, see our note on senior worker CPF rates from 2027.

Can you pay in instalments, and what happens if the employee disputes the amount?

Yes, instalments are allowed if both sides agree. An employee who thinks the amount is unreasonable can go to the Tripartite Alliance for Dispute Management (TADM) within 6 months of the last day of employment.

Section 7C(4) of the RRA allows a lump sum by the last day of employment or another mutually agreed arrangement. MOM’s FAQ gives instalments over three months as an example.

On disputes, MOM’s re-employment page sets two timelines:

• An employee who disputes the employer’s reasons for not offering re-employment can notify the Commissioner for Labour within 1 month after the last day of employment.
• An employee who feels the re-employment terms or the EAP amount are unreasonable can approach TADM within 6 months after the last day of employment.

If TADM mediation fails, section 8C of the RRA lets the employee, once a claim referral certificate is issued, lodge a claim for the payment with the Employment Claims Tribunal. The tribunal may take into account the tripartite guidelines and the steps the employer took to re-employ, and may order any amount it considers just and equitable. In other words, the tribunal is not bound to the guideline figure. Our article on Employment Claims Tribunal salary claims explains how the tribunal process runs.

Keep a record of the vacancies reviewed, the consultation meetings (starting at least 6 months before the employee turns 64) and the written offer or explanation.

Will the amounts change in 2027?

Higher amounts are coming, but no new figures exist yet. On 26 October 2026 the Government accepted the Tripartite Workgroup on Senior Employment’s recommendation to raise the recommended minimum and maximum EAP amounts, last updated in 2022, to reflect wage growth.

MOM’s press release says details of the measures will be released in the first half of 2027. Until MOM updates the Tripartite Guidelines, S$6,250 to S$14,750 for the regular payment and S$4,000 to S$8,500 for the stepped-down payment remain the current recommended amounts. Ignore any new figure you see quoted that MOM has not published. When the new amounts arrive, check the effective date MOM gives before applying them.

The guidelines also say an employer retrenching an employee already on re-employment should offer financial help using the EAP as a reference. For the eligibility side, see our overview of re-employment ages and employer duties. The full recommended amounts are in the Tripartite Guidelines on the Re-employment of Older Employees.

Frequently asked questions

Is the employment assistance payment compulsory?

For an eligible employee whom the employer cannot re-employ, and who is not transferred to another employer, yes. Section 7C of the RRA treats the payment as the alternative to re-employment, and the guidelines set the recommended amount.

Does an Employment Pass holder get the EAP?

No statutory right arises. Re-employment eligibility is limited to Singapore citizens and permanent residents, so the EAP duty does not apply to work pass holders, although an employer may choose to make a goodwill payment.

Can an employer pay less than the minimum?

The guidelines set S$6,250, or S$4,000 for the stepped-down payment, for a full-time employee. Paying less risks a tribunal claim.

What if the employee says he or she does not want to keep working?

Section 7C(3) of the RRA says no payment is required if the employee tells the employer of a decision not to continue being employed by that employer on or after the specified age. Get that decision in writing, as the guidelines advise.

Need help with this? Call, SMS or WhatsApp +65 8501 7133, or email [email protected]. Little Big Employment Agency (EA Licence 19C9790) works with a panel of corporate and employment law firms; this article is general information, not legal advice.

Last reviewed: 6 November 2026. The Editorial Team, Little Big Employment Agency.