Singapore Recommends 6% to 8% Pay Rises for Lower Wage Workers, Adds S$120 Floor for Unprofitable Firms

Higher pay recommendations come with more room for struggling firms

Singapore's National Wages Council has recommended permanent pay increases of 6% to 8% for workers earning up to S$2,800 a month, while introducing a new category urging employers that are unprofitable to give these workers at least S$120 more each month.

Announced on October 19, 2026, the guidelines cover December 1, 2026, to November 30, 2027. Employers that have performed well should give increases within the recommended percentage range, or at least S$135 to S$170, whichever is higher, with the amount depending on their performance and prospects.

The government has accepted the recommendations. They apply to employees in public and private organisations, including firms with and without unions, but remain voluntary. Mandatory wage requirements under other schemes continue to apply to employers covered by those schemes.

The council brings together representatives of government, employers and the labour movement. Its central message is that businesses benefiting from Singapore's stronger economy should share their gains, while companies under financial pressure have room to adjust.

National Trades Union Congress president K Thanaletchimi said the percentage range is the highest since numerical wage recommendations for lower wage workers began in 2021. The previous range was 5.5% to 7.5%, meaning both ends have risen by half a percentage point.

Singapore National Employers Federation president Kuah Boon Wee said about 20% of the resident workforce earns S$2,800 or less a month. For those workers, the recommendations could affect regular household income, rather than simply the size of a bonus.

How much should each employer give?

The council divides employers into four groups. A company's recent results and its expectations for business determine where it falls:

• Employers that have performed well and have positive prospects should give increases at the higher end of 6% to 8%, or at least S$135 to S$170, whichever is higher.
• Employers that have performed well but face uncertain prospects should give increases around the middle of that range, or at least S$135 to S$170, whichever is higher.
• Employers that have not performed well but remain profitable should give increases at the lower end of 6% to 8%, or at least S$120, whichever is higher.
• Employers that have not performed well and are unprofitable should give increases of at least S$120.

Companies that have performed particularly well are encouraged to go beyond these levels. Employers should also review wages and consider further increases if business prospects improve.

A built-in increase raises regular wages, unlike a bonus paid on one occasion. The percentage and dollar comparisons matter most at different earnings levels. For a worker earning S$2,800, 6% is S$168 and 8% is S$224. For someone earning S$1,500, the same percentages produce S$90 and S$120, so the recommended dollar amounts for stronger firms would deliver more.

The new S$120 recommendation for an unprofitable employer would equal 8% of a S$1,500 monthly wage, or about 4.3% of S$2,800. A fixed dollar increase therefore gives a larger percentage boost to someone starting with less.

Why unprofitable firms have a separate category

The council has, for the first time, set a specific recommendation for firms that performed poorly and are unprofitable. These are businesses whose total expenses exceed their total income.

Kuah said many employers had found the previous recommended percentage range difficult to meet. He described the S$120 floor as an achievable target that would still provide a meaningful increase for workers on the lowest wages.

National Wages Council chairman Hsieh Fu Hua explained why the council added flexibility:

In view of the uneven growth across lower-wage worker hiring sectors and firms, the NWC also recognises the need for greater flexibility.

Ministry of Manpower Permanent Secretary Stanley Loh said profitability was chosen because it can be checked more readily than a broad description of whether a business has performed well. The ministry checks employer declarations through its surveys. Kuah said the employers federation would also work with businesses to guard against inaccurate claims of being unprofitable.

Strong growth has reached sectors unevenly

Singapore's gross domestic product grew 6% from a year earlier in the first three quarters of 2026, according to advance estimates. Labour productivity rose 3.8% from a year earlier in the first half. Productivity measures how much output workers produce; higher output can help businesses support higher wages.

Electronics and precision engineering benefited from strong global demand for products connected to artificial intelligence. Food and beverage services, by contrast, contracted. The economy's headline growth rate therefore sits alongside very different conditions for individual employers.

Loh said firms benefiting from demand related to AI should share their gains with workers. Businesses serving consumers, including food and beverage services, needed to continue changing how they operate to support sustainable pay increases.

Melissa Ng, executive secretary of the Food, Drinks and Allied Workers Union, said businesses in the sector face cost pressures while workers across different roles have contributed to its resilience. She welcomed the stronger wage recommendations as an important boost for many workers.

The Singaporean-German Chamber of Industry and Commerce also welcomed the balance between stronger economic performance and business uncertainty. Its executive director, Tim Philippi, called for continued monitoring of the combined impact of employment costs on competitiveness and highlighted difficulties finding skilled local staff.

Low adoption helps explain the revised approach

Slightly more than a quarter of employers met the previous recommendations for lower wage workers, Loh said. Adoption had exceeded 70% when the guidelines covered a smaller group. Coverage expanded in 2021, alongside higher recommended increases.

Loh said more than 60% of employers that fell short of the guidelines still raised wages, although by less than the recommended amounts. The council hopes the new category will encourage more struggling firms to meet an explicit target.

Thanaletchimi said transparency over business performance helps workers understand wage decisions. She pointed to safeguards including the Industrial Relations Act and said:

When you are transparent, you build trust with your workers.

The key dates and reference periods are:

• March 2025 to March 2026: the business performance period used, aligned with the Ministry of Manpower's Survey on Annual Wage Changes.
• August to October 2026: the council met to formulate the recommendations.
• October 19, 2026: the guidelines were announced.
• December 1, 2026, to November 30, 2027: the period covered by the new guidelines.
• 2028: the Progressive Wage Credit Scheme has been extended through this year.

Where voluntary guidance meets mandatory wage rules

The Ministry of Manpower says measures including the Progressive Wage Model, Local Qualifying Salary and Progressive Wage Mark accreditation scheme benefit up to nine in 10 employees working full time on lower wages.

The Progressive Wage Model and Local Qualifying Salary set mandatory wage requirements for employers covered by their respective rules. The National Wages Council recommends annual increases, giving employers guidance on how pay should move with business conditions.

Some workers fall outside the Progressive Wage Model and Local Qualifying Salary. These include employees of small businesses that do not hire foreign workers and operate outside sectors covered by the Progressive Wage Model. For those employers, the council's guidelines encourage increases based on performance and financial circumstances.

The government will continue helping eligible employers fund wage increases through the Progressive Wage Credit Scheme, which has been extended to 2028. This support sits alongside the council's request for companies to share gains with workers.

The council's longer term aim is for lower wage workers to close some of the gap with the worker at the middle of the earnings scale. That requires their wages to rise consistently faster than the median wage over the decade.

What the guidelines mean for other workers

Employers with good results and positive prospects should reward employees more broadly through permanent increases and variable payments, such as bonuses. Companies performing well but facing uncertainty may moderate permanent increases while using variable payments to recognise contributions.

Employers that have not performed well may restrain wage growth, with management leading by example. Those expecting business to improve should consider setting out future variable payments linked to suitable business indicators.

The council also urged full use of the flexible wage system, including annual and monthly variable components. These are portions of pay that can change with business conditions, giving firms a way to adjust costs during a downturn and raise compensation more quickly when conditions improve.

Loh said inflation was "a bit higher but manageable" and that additional measures such as a special annual payment were unnecessary. Employers may still use bonuses as part of the council's broader wage recommendations. Singapore National Employers Federation chief executive Hao Shuo said gross monthly income, after allowing for inflation, had risen in the first half of 2026.

Training has fallen as AI changes workplaces

The council's call for higher productivity comes as participation in organised workplace training has declined. Ministry of Manpower figures show that 64% of employers provided structured training in 2025, down from 66.4% in 2024.

The share of employees receiving that training fell from 52.6% to 48.1% over the same period. That is a decrease of 4.5 percentage points, leaving fewer than half of employees receiving structured training in 2025. The employer share fell by 2.4 percentage points.

The council urged employers to use AI responsibly, redesign jobs and invest in staff development. Workers were encouraged to build knowledge of AI alongside their professional expertise, judgment and communication skills. The aim is for employees to understand both the technology and the work to which it is applied.

Employers should set aside enough money for continued training across career stages, support courses initiated by employees and hold structured career discussions to identify new skills and possible roles. The recommendations also include strengthening human resources capabilities to support changes at work.

Kuah said AI adoption should be directed toward higher productivity and new employment opportunities, rather than approached as an opportunity to cut staff. Some roles may disappear as technology changes, while others emerge in different areas.

Protected time would make training part of work

Thanaletchimi called on employers to give workers protected time for training and opportunities to move into work that creates more value, particularly in areas involving AI. Her request addresses the practical problem of fitting learning around existing duties.

The NTUC president explained what employers would need to arrange:

In practical terms, this means planning workloads and work arrangements so that employees can attend relevant training without having to compromise their work responsibilities or solely rely on their personal time.

For workers, that would mean having time set aside for courses instead of having to complete all learning after work. For employers, it would require planning staffing and workloads alongside training budgets.

Hsieh said the council would also address employment for older workers, although not in this year's guidelines. No date was given for that work. The immediate recommendations focus on pay increases suited to company circumstances, alongside investment in skills and changes to jobs that can support future wage growth.

Key Points

• The guidelines cover December 1, 2026, to November 30, 2027, and recommend increases of 6% to 8% for workers earning up to S$2,800 a month, depending on employer performance and prospects.
• Stronger employers should apply the relevant percentage recommendation or a dollar increase of at least S$135 to S$170, whichever is higher.
• A new category recommends at least S$120 more each month for lower wage workers at firms that performed poorly and are unprofitable.
• The government has accepted the guidelines, which remain voluntary. Mandatory requirements under other wage schemes continue to apply.
• Slightly more than a quarter of employers met the previous recommendations, although many others gave smaller increases.
• Structured training participation fell in 2025. The council urged investment in AI skills, job redesign and protected training time.