National Wages Council recommends 6% to 8% pay raise for lower-wage workers, highest since 2021

Employers that have performed well are encouraged to give lower-wage workers earning up to S$2,800 a month wage increases of six to eight per cent, or at least S$135 to S$170, whichever is higher, under the National Wages Council's (NWC) latest guidelines.

The guidelines, announced on Oct. 19, cover the period from Dec. 1, 2026, to Nov. 30, 2027.

The NWC said this year's guidelines adopt a "positive-leaning approach" to wage increases, following Singapore's stronger-than-expected economic performance.

However, it acknowledged that economic growth has been uneven across sectors and firms, with some employers facing financial constraints.

The government has accepted the guidelines.

Higher wage increases for lower-wage workers

The recommended built-in wage increase of six to eight per cent is the highest since quantitative wage guidelines for lower-wage workers were introduced in 2021, according to the National Trades Union Congress (NTUC).

The recommendations apply to workers earning a gross monthly wage of up to S$2,800.

Under the guidelines, employers can adjust wage increases according to their business performance and prospects.

• Employers that have performed well and have positive business prospects: A built-in wage increase at the higher end of six to eight per cent, or at least S$135 to S$170, whichever is higher.
• Employers that have performed well but face uncertain business prospects: A built-in wage increase around the middle of six to eight per cent, or at least S$135 to S$170, whichever is higher.
• Employers that have not performed well but remain profitable: A built-in wage increase at the lower end of six to eight per cent, or at least S$120, whichever is higher.
• Employers that have not performed well and are unprofitable: A built-in wage increase of at least S$120.

Employers that have performed particularly well should consider giving wage increases above the recommended levels.

Just over a quarter of employers met NWC wage recommendations

Speaking at a press conference to announce the guidelines, Permanent Secretary for the Ministry of Manpower (MOM) Stanley Loh said slightly more than a quarter of employers met last year's wage recommendations for lower-wage workers.

The adoption rate had previously exceeded 70 per cent when the recommendations covered a smaller group of lower-wage workers.

However, the rate subsequently fell after the guidelines were expanded in 2021 to cover more workers, alongside higher recommended wage increases.

This did not mean that employers who failed to meet the guidelines had not given their workers pay raises. More than 60 per cent of these employers had still raised wages in the previous year, although the increases fell short of the recommended levels.

Existing wage schemes cover up to nine in 10 lower-wage workers

According to MOM, up to nine in 10 full-time lower-wage workers benefit from the schemes such as the Progressive Wage Model (PWM), the Local Qualifying Salary (LQS), and the Progressive Wage Mark accreditation scheme.

During the Q&A segment of the press conference, Loh explained that the PWM and LQS set mandatory wage requirements for employers covered by the respective schemes, while the NWC guidelines recommend annual wage increases.

Loh said some lower-wage workers may not be covered by the PWM or LQS, such as those working for small businesses that do not hire foreign workers and are outside PWM-covered sectors.

The NWC guidelines aim to encourage these employers to raise wages as well, based on their business performance and financial circumstances.

The government will also continue supporting wage increases for eligible lower-wage workers through the Progressive Wage Credit Scheme, which has been extended to 2028.

Employers encouraged to give fair wage increases

Beyond lower-wage workers, the NWC also encouraged employers to adopt a positive-leaning approach to wage increases for their employees.

Employers that have performed well and have positive business prospects should reward workers through built-in wage increases and variable payments, such as bonuses, in line with business performance and employees' contributions.

Companies that have performed well but face uncertain prospects may moderate built-in wage increases while providing variable payments.

Meanwhile, employers that have not performed well may exercise wage restraint, with management leading by example.

The NWC said wage increases should remain aligned with productivity growth to ensure they are sustainable.

According to advance estimates, Singapore's gross domestic product (GDP) grew by six per cent year-on-year in the first three quarters of 2026.

Labour productivity also rose by 3.8 per cent year-on-year in the first half of 2026.

However, growth was uneven across sectors, with strong global demand for AI-related products benefiting electronics and precision engineering, while the food and beverage services sector contracted.

Greater emphasis on AI skills and training

The NWC also urged employers to invest in workforce training and job redesign as artificial intelligence (AI) transforms workplaces.

Employers were encouraged to adopt AI responsibly and invest in workforce development, while workers were urged to build AI-related skills and continue upskilling.

NTUC president K Thanaletchimi also called on employers to provide protected training time so workers can attend courses without relying solely on their personal time.