Wage growth slowed for Singapore workers in 2025, expected to stay moderate in 2026: MOM
Although nominal wages grew more slowly in 2025, real wages grew faster because inflation eased.
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SINGAPORE: Nominal wages of full-time resident employees grew at a slower pace in 2025 than in the previous year, according to the latest Ministry of Manpower (MOM) data on Thursday (May 28).
Total wages – which include basic pay, annual variable components and employer contributions to the Central Provident Fund (CPF) – grew by 4.9 per cent in 2025, down from 5.6 per cent in 2024.
The slower growth was because of easing inflation, which may have reduced upward pressure on firms to raise nominal wages, MOM said in a press release.
Singapore’s core inflation averaged 0.7 per cent in 2025, down from 2.8 per cent in 2024. Core inflation is projected to rise in 2026.
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After accounting for inflation, real wages grew by 4 per cent in 2025, higher than 3.2 per cent in 2024 and indicating stronger purchasing power for workers.
“Looking ahead to 2026, real wage growth is expected to remain positive, although firms are expected to remain measured in their wage increases amid geopolitical uncertainties and inflationary pressures,” said MOM.
Over the longer term, sustaining real wage growth will depend on the economic outlook, productivity improvements, workforce upgrading as well as wage-setting practices, said the ministry.
PROFITS AND WAGES
The ministry said most establishments were supported by “broad profitability” in 2025 and had raised wages.
More firms – 83.1 per cent – reported that they were profitable in 2025, compared to 80.8 per cent in 2024.
The proportion of firms that reported stable or improved profitability was 64.1 per cent, similar to 62.7 per cent in 2024.
Fewer firms – 16.9 per cent – reported a loss in 2025, compared to 19.2 per cent in 2024.
In terms of salaries, the ministry found that fewer firms – 72.4 per cent – granted employees wage increases in 2025, compared to 78.3 per cent in 2024.
More establishments kept wages unchanged – 24.5 per cent in 2025, up from 18.5 per cent in 2024.
Where wage increases were granted last year, the increments averaged 5.8 per cent.
This reflects that employers showed signs of greater prudence in wage changes for 2025, said MOM.
Employee retention remained the most commonly cited reason for raising wages.
Only 3.1 per cent of firms cut wages, down slightly from 3.2 per cent in 2024.
The firms that cut wages generally experienced weaker business performance than in 2024.
Where there were wage cuts, the reductions averaged 3.7 per cent.
The National Wages Council’s recommendation for December 2024 to November 2025 was for employers to reward employees with fair and sustainable wage increases, taking into account sustained productivity growth over the long term.
The council said that employers who have done well should reward their employees with built-in wage increases and variable payments.
According to the MOM data on Thursday, 79.4 per cent of firms that were profitable and did much better than the previous year raised wages in 2025. The remaining 18.1 per cent cut employees’ wages, and 2.5 per cent did not change wages.
Among firms that were profitable and did as well as the previous year, 76.3 per cent raised wages, while 22.6 per cent cut wages and 1.1 per cent kept them the same.
Asked by reporters at a briefing why some profitable firms did not raise salaries, apart from greater prudence, Mr Ang Boon Heng, director of MOM's manpower research and statistics department, said that some employers feel they are already paying their employees at the industry benchmark.
BROAD-BASED WAGE GROWTH
In 2025, wages grew across the rank-and-file (4.8 per cent), junior management (5.1 per cent) and senior management (4.9 per cent) employees, but at more moderate paces compared to 2024 for all three employee groups.
MOM said it was notable that the differences in wage growth narrowed across these employee groups, suggesting more broad-based wage gains.
Across all sectors, wages grew, albeit at a slower pace for most. This signalled that wage momentum had eased in a more cautious business environment, said MOM.
Administrative and support services recorded the highest wage growth at 7.5 per cent, although this was also down from 2024.
Lower-wage workers in this sector were supported by the Progressive Wage Model and local qualifying salary requirements.
Financial services and insurance services also recorded relatively strong wage growth of 5.9 per cent and 6.6 per cent respectively, amid continued demand for professionals, managers and executives, said MOM.
The accommodation sector recorded the largest moderation in wage growth as labour demand stabilised following a hiring surge during the post-pandemic recovery, MOM added.
LOOKING AHEAD
Speaking to reporters on Thursday, MOM's Mr Ang said 2026 salary changes are expected to remain positive because Singapore’s labour market remains tight and productivity continues to grow.
As wages in Singapore grow in tandem with productivity, this means that such increments are sustainable, at least over the medium term, said Mr Ang.
But he noted that the wage-setting process might change in 2026 as employers become more cautious amid the current economic conditions and geopolitical tensions.
Mr Ang also said there could be more divergence in wage growth across the sectors in 2026, with external-oriented sectors facing more pressures arising from the global tariffs situation.
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