National Wages Council recommends 5.5% to 7.5% pay rise for lower-wage workers in 2026

[SINGAPORE] Employers should give their lower-wage workers built-in wage increases of between 5.5 and 7.5 per cent in the year ahead, the National Wages Council (NWC) said on Tuesday (Nov 11) in its latest wage guidelines.

The recommendations apply to workers earning a gross monthly wage of up to S$2,700. Employers who have performed well and have positive business prospects should provide built-in wage increases at the higher end of the range, or a minimum increase of S$105 to S$125, whichever is higher.

Employers who have done well but face uncertain prospects should give their lower-wage workers a built-in wage hike at the “middle to lower end” of the recommended range, or an increase of at least S$105 to S$125, whichever is higher.

The wage guidelines, which cover the period from December 2025 to November 2026, come as Singapore’s economy faces significant headwinds, with full-year gross domestic product growth projected at just 1.5 to 2.5 per cent for 2025 – though this was an upgraded forecast from the previous 0 to 2 per cent official range.

In 2024, the proportion of companies which adopted the NWC recommended quantum of wage increase for their lower-wage workers was 26.2 per cent, said the Ministry of Manpower (MOM).

Additionally, 60 per cent of firms gave wage increases of any amount to low-wage workers.

Downside risks from the United States’ tariff measures also weigh on Singapore’s growth outlook, NWC noted.

Separately, NWC issued higher wage requirements for administrators and drivers under the Occupational Progressive Wages (OPW) scheme, with increases to kick in from July 2026, and a further raise in July 2027.

The updated requirements will apply to about 57,600 lower-wage workers who are full-time resident administrators and drivers in companies that employ foreign workers.

SEE ALSO

Economists upgrade GDP estimates after Singapore’s manufacturing output surprises with 16.1% surge in September

Singapore’s total employment up by 24,800 in Q3; resident employment growth expected to lag: MOM

Too afraid to quit? Welcome to job hugging

Of these, about 43,800 administrators and 9,400 drivers were earning below the new 2026 OPW wage requirement as in 2024, and can expect to see their wages increase from Jul 1, 2026.

In this uncertain economic environment, this year’s wage hike recommendations were to make sure that lower-wage workers are still being considered, said NWC chairman Peter Seah.

National Trades Union Congress assistant secretary-general Patrick Tay said the NWC recommendations play an important role when employment disputes are escalated to the Tripartite Alliance for Dispute Management, as they are referenced when determining the direction of mediation.

More importantly, the guidelines carry weight in the Industrial Arbitration Court, Tay added. They have been referenced in court hearings on “numerous occasions” over the past decade when representing workers in disputes involving non-payment, underpayment or wage shortfalls.

Enhanced job ladders

NWC also enhanced the job ladders for drivers, expanding them to four levels, from two, to better reflect career pathways. Level 2 drivers now include those who perform higher-value activities such as first aid, handling hazardous materials, mentoring and training, or route planning.

For administrators, the council updated job descriptions to keep pace with digital transformation, with wage recommendations reflecting the greater productivity of transformed roles.

OPW wage requirements are enforced through employers’ eligibility for work passes. Companies that hire foreign workers must comply with the stipulated OPW requirements to apply or renew mainstream work passes.

Productivity growth

NWC reiterated that wage growth should be in line with productivity growth, noting sustained productivity gains over the longer-term, despite current economic uncertainties.

Labour productivity rose 2.9 per cent year on year in the first half of 2025, while real gross monthly income grew 3.2 per cent over the same period.

Still, it noted that there were signs of labour market softening. Job vacancies declined, and business sentiments have cooled, with the proportion of firms planning to hire in the third quarter of 2025 falling to 43.7 per cent in June, from 44 per cent in March.

The proportion of firms planning wage increases also fell to 22.4 per cent, from 24.4 per cent, over the same period.

NWC called on all employers who have not yet done so to implement the Flexible Wage System, comprising both annual and monthly variable components, in full.

In 2024, the majority of companies – at 76 per cent – have either adopted the monthly variable component or annual variable component in their wage structure. This was, however, lower than the 77.3 per cent of firms which adopted such systems in 2023.

Those that implemented both components of the Flexible Wage System remained “largely stable” at 8.5 per cent in 2024, said MOM.

For employers who have done well but face uncertain business prospects, NWC said they may exercise moderation in built-in wage increases but should still reward employees with variable payments commensurate with performance and contributions.

Meanwhile, employers who have not done well may exercise wage restraint, with management leading by example, the council added.

The wage guidelines apply to all employees in unionised and non-unionised companies in both public and private sectors. This includes professionals, managers, executives, technicals and re-employed employees in full-time and part-time employment.

“Balanced and sustainable”

MOM has accepted NWC’s latest guidelines, adding that the recommendations “balance meaningful wage increments with business sustainability and will bolster ongoing efforts to narrow the income gap”.

“The government will continue to work with tripartite partners to champion fair, inclusive and sustainable wage growth for our workers… while ensuring that our businesses stay competitive,” the ministry added.

Meanwhile, Singapore National Employers Federation (SNEF) said the guidelines “provide a clear framework for employers to align wage increases with productivity growth to build sustainable businesses”.

Wage growth backed with productivity gains will ensure that businesses remain competitive to deliver long-term growth that “ultimately benefits workers”, said SNEF.

SNEF also encouraged employers to regularly review market benchmarks and adjust wage ranges to remain competitive.

NTUC said it supports the wage guidelines, and urged employers to adopt them and “share the gains from labour productivity improvements and reward all workers with wage increases that are fair and sustainable”.

The union also welcomed the changes to the OPW, stating that these updates “aim to provide meaningful wage uplift and support skills development, ensuring lower-wage workers in (these) roles can benefit from career progression and improved wages”.