CALCULATION OF VALUE ADDED PRODUCTIVITY (at firm level)

  

Value Added Productivity (VAP)

Value Added Productivity

(VA per employee)

=

Firm’s Value Added ($)

  

Total number of employees on firm’s payroll

  

Components of Value Added

Value added of a firm can be calculated from a firm’s audited accounts by adding the following components.

FIRM'S VALUE ADDED = TOTAL REMUNERATION + OPERATING PROFIT BEFORE TAX + DEPRECIATION + INDIRECT TAXES AND LEVIES

Total Remuneration*


This refers to total compensation to employees (including all local and foreign workers, PMETs and directors on your Company's payroll) which constitutes the following:

  • Wages & salaries, overtime payments, commissions, bonuses & payments under profit-sharing schemes (e.g. employee stock options)
  • Working and non-working directors' fees
  • Benefits in kind (such as housing, travelling expenses to and from work, medical and welfare benefits)
  • Employer’s CPF contribution
  • Pension funds and insurance premiums for employees
*Total Remuneration should not net off Jobs Credit grants received by your Company.

Operating Profit before tax

This is derived after deducting all operating expenditure from operating receipts.

Items such as interest paid, amortisation, assets/stocks written off, bad debts, loss of sales of fixed assets/stocks/foreign exchange transactions, rental of land, donations and association subscriptions are NOT operating expenditure.

Items such as gains from sales of fixed assets/stocks/other securities/foreign exchange transactions, recovery of bad debts, provision written back, interest received, dividends received, insurance claims are NOT operating receipts.

Depreciation
This refers to depreciation on:

1) Land, Building & Structure (owned by your enterprise but not for resale purpose)
2) Plant, Machinery and Equipment
3) Transport Vehicles (used for business activity only)
4) Computers & Peripheral Equipment (includes computers, printers, scanners, etc)
5) Computer Software (which are capitalized)
6) Furniture & Fittings

Indirect Taxes and Levies


Indirect taxes refer to property taxes, road tax and other taxes such as license fees, stamp duties but exclude corporate taxes and personal income taxes.

Levies refer to foreign workers levy.
 

  

Total number of employees on firm’s payroll

The total number of employees includes both local and foreign workers and PMETs (Professionals, Managers, Executives and Technicians) who are on the firm’s payroll. The total number of employees for the reference year can be derived by adding the average number of employees for each month and divide by 12.

Click here to use:

           

1) Online VAP Calculator 1 (to calculate VAP in a particular year)

                                   

2) Online VAP Calculator 2 (to calculate VAP improvement over 2 consecutive years)