In today's competitive business environment, retaining dedicated employees is more than just a human resources goal—it's a strategic imperative. One powerful yet often underutilised method of acknowledging employee loyalty and boosting morale is through a service award programme. For organisations in Singapore, such awards not only foster a culture of appreciation but can also enhance employer branding and employee engagement.
Whether you're a business owner, HR professional, or team leader, this guide will walk you through everything you need to know about service awards in Singapore—from their significance and types to tax implications and best practices.
What Is a Service Award?
A service award is a form of recognition given to employees to honour their long-term commitment and contributions to the organisation. These awards are typically based on the number of years an employee has served and can be in the form of cash, gifts, trophies, or even additional leave.
There are two main categories of service awards in Singapore:
- Long Service Awards (LSA) – recognising employees who have remained loyal to the organisation for extended periods (e.g., 5, 10, 15, or 20 years).
- Excellent Service Awards (EXSA) – recognising frontline employees who deliver outstanding customer service, typically in the retail and service sectors.
Why Service Awards Matter in Singapore
With the rising costs of recruitment and training, employee retention has become increasingly important for employers. According to local HR trends, recognising tenure and performance contributes significantly to employee satisfaction and loyalty.
Key benefits of implementing a service award programme include:
- Increased retention: Employees feel valued and are more likely to stay.
- Enhanced morale: Public recognition fosters a sense of belonging and motivation.
- Positive workplace culture: Celebrating milestones reinforces your organisational values.
- Employer branding: Being known as an organisation that values long-term employees can attract quality talent.
Long Service Awards (LSA) in Singapore
Long Service Awards are one of the most common types of employee recognition in Singapore. These awards usually commemorate milestones like 5, 10, 15, 20, or more years of continuous service.
What Qualifies as a Long Service Award?
an LSA is typically non-performance related and is solely based on tenure. It can take various forms, such as:
- Commemorative plaques or trophies
- Vouchers or gifts
- Additional paid leave
- Cash bonuses
Best Practices for Long Service Award Programmes
If you’re looking to introduce or enhance a long service award programme in your organisation, consider the following:
- Start early: Recognise employees from the 3 or 5-year mark.
- Celebrate publicly: Host a company event or town hall to honour recipients.
- Offer personalised rewards: Where possible, let employees choose their preferred gift.
- Ensure fairness and consistency: Clearly communicate the criteria and ensure it applies to all departments and levels.
The Excellent Service Award (EXSA): Setting the Standard for Customer Service
In the retail and service sectors, exceptional customer experience is crucial. The Excellent Service Award (EXSA), administered by the Singapore Retailers Association (SRA), recognises individuals who go above and beyond in customer service.
Overview of EXSA
The EXSA programme is a national initiative supported by Enterprise Singapore. It aims to develop service champions within the industry and promote service excellence across the nation.
There are four tiers of recognition:
- Silver
- Gold
- Star
Each tier is awarded based on the quality and consistency of service delivery, as assessed through customer feedback and internal nominations.
Eligibility and Nomination
- At least 1 year of service with the nominating organisation
- Open to all full-time and part-time customer-facing employees in Singapore.
- Employers must nominate individuals, with supporting documentation and endorsements.
Detailed eligibility criteria can be found at EXSA official page.
Benefits of EXSA for Employers
- Improves service standards across the organisation.
- Creates role models for other employees.
- Strengthens organisational reputation and trust with customers.
Tax Treatment of Service Awards in Singapore
One crucial consideration for employers when giving out service awards is the tax treatment of such awards.
According to the IRAS guidelines, the tax implications differ depending on the nature of the award.
Are Service Awards Taxable?
1. Cash Awards
- Taxable: Any cash or gift vouchers given as service awards are considered employment income and are taxable in full.
2. Non-Cash Awards
- Non-cash awards not exceeding $200 are not taxable due to an administrative concession.
- If the value of the award exceeds this exemption threshold, the entire value becomes taxable. Employers must declare the cost incurred for taxable awards.
3. Other Awards
- Performance-based awards or those tied to KPIs are fully taxable regardless of form.
Employer Responsibilities
Employers must report all taxable awards in the employee’s IR8A form under ‘Gains and Profits from Employment’. For non-taxable long service awards, documentation should be kept in case of audits.
Is the Service Award subjected to CPF contributions?
CPF contributions are payable on cash awards given to your employee in recognition of his long service.
However, to promote loyalty, CPF contributions are not payable on Long Service Award (LSA) that is given to your employee with at least 5 years of service and subsequent LSA for each 5-year period of service with you, up to the amount of your employee’s Ordinary Wages (OW) for the month in which the LSA is paid. In the event that there are multiple types of LSA given to the same employee, only the first LSA granted to the employee in each 5-year period can qualify for this exemption.
If the LSA exceeds the OW for the month, CPF contributions are payable on the amount in excess of OW. If your employee has no OW payable in that month, CPF contributions are payable on the entire LSA.
| Long Service Award (LSA) Scenarios | Are CPF contributions payable? |
| LSA amount is OW and below | No |
| LSA amount is more than OW | Yes, on the amount of LSA exceeding OW |
| OW is $0 | Yes, on the entire LSA |
How to Design an Effective Service Award Programme
Designing a service award programme that is both meaningful and compliant involves several key steps.
1. Define Your Objectives
What do you hope to achieve—retention, motivation, or brand reputation? Clarifying your goal helps determine the types of awards and frequency of recognition.
2. Establish Eligibility Criteria
Set clear criteria for who qualifies, such as minimum years of service, full-time status, or clean disciplinary records.
3. Choose Award Types
- Tangible rewards: Vouchers, gadgets, travel packages
- Experiential rewards: Team lunches, trips, sabbaticals
- Symbolic awards: Certificates, plaques, thank-you letters
4. Schedule Recognition
- Celebrate during town halls, annual dinners, or National Day observances.
- Consider quarterly or annual cycles for more frequent milestones.
5. Communicate Transparently
Make sure all employees understand how the programme works and how they can qualify. Include it in your employee handbook and onboarding material.
Service Award Ideas: Examples in Singapore
Looking for inspiration? Here are some service award ideas tailored for the Singapore workforce:
| Years of Service | Suggested Award |
|---|---|
| 3 years | $50 voucher + Certificate of Appreciation |
| 5 years | Commemorative gift worth $250 + 1 extra day of leave |
| 10 years | $500 travel voucher + trophy + feature in company newsletter |
| 15 years | Staycation package + 3 extra days of leave |
| 20 years | Gold-plated watch + lifetime achievement award plaque |
Common Pitfalls to Avoid
When launching or revamping your service award programme, be wary of these pitfalls:
- One-size-fits-all rewards: Generic gifts may not resonate with everyone.
- Lack of follow-through: Failure to consistently implement the programme erodes trust.
- Neglecting informal recognition: Formal awards are great, but regular informal praise matters too.
- Forgetting tax implications: Non-compliance can result in penalties during audits.
Final Thoughts: Building a Culture of Recognition
In Singapore’s fast-paced work culture, it’s easy to overlook the value of sustained employee contributions. A well-crafted service award programme bridges that gap, reminding employees that their loyalty and excellence do not go unnoticed.
Whether you are recognising a five-year milestone or honouring a career-long commitment, service awards help create a workplace where people feel appreciated, engaged, and proud to belong.
If your organisation has yet to implement a structured recognition programme, now is the perfect time to start. Explore how you can complement service awards with tools like Gutsy' career progression tracking to better support long-term employee growth and satisfaction.
