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Total wages continued to grow in 2024

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1. As Singapore’s economy continued to grow in 20241, the proportion of profitable establishments remained high, and a majority of establishments continued to raise the wages of their employees. The labour market remained tight in 20242  with nominal wage growth broadly matching 2023 levels. As inflation has eased, real wage growth picked up in 2024. However, going forward, downside risks from geopolitical tensions and global trade uncertainties have weighed on business sentiments. MOM’s forward-looking survey conducted in the first quarter of 2025 indicated a decline in the share of firms planning wage increases3. These trends point to a potential moderation in nominal wage growth in 2025 compared to 2024, especially in trade-reliant sectors such as Manufacturing and Wholesale Trade.

Main Findings

Nominal and real wages continued to grow in 2024; real wage growth picked up as inflation eased

2. Nominal total wages4  (including employer CPF contributions) of full-time resident5  employees who had been with the same employer for at least one year continued to grow, increasing by 5.6% in 2024 – comparable to 2023 (5.2%). As nominal wage growth outpaced inflation, which has eased from 20236 , real wage growth picked up in 2024 (3.2% compared to 0.4% in 2023). Over the medium-term, real wage growth continues to be supported by real productivity growth7.

Although a majority of establishments remained profitable, profitability varied across industries

3. A majority of establishments remained profitable in 2024 (80.8%), although it has declined from 2023 (82.1%). However, profitability varied across industries. Industries such as Real Estate Services, Construction and Wholesale Trade saw fewer profitable establishments, while Manufacturing observed an increase in profitable establishments. However, amid global trade tensions, the proportion of profitable establishments in trade-reliant industries such as Manufacturing and Wholesale Trade would likely decline in the coming year.

More establishments gave wage increases to their employees in 2024

4. As most establishments remained profitable, the proportion of establishments that provided wage increases rose from 65.6% in 2023 to 78.3% in 2024, though a majority of establishments gave the increases due to past organisational performance rather than forward-looking confidence. Concurrently, there was a decline in the proportion of establishments that cut the wages of their employees, from 6.5% in 2023 to 3.2% in 2024. The remaining (18.5%) establishments held wages of their employees constant.

5. Among establishments which raised wages, the average wage increase in 2024 (6.6%) has moderated from 2023 (7.2%). However, among establishments which cut wages, the magnitude of wage cut was smaller in 2024 (-3.6%) than in 2023 (-6.2%).

All types of employees experienced wage growth in 2024

6. Rank-and-File (RAF) and Junior Management employees saw slightly higher wage growth (5.8% and 5.6%, respectively) compared to Senior Management (5.1%), partly reflecting efforts to offset cost-of-living pressures8.

7. Policy factors, such as increases in the Local Qualifying Salary9  and the implementation of Progressive Wage Model initiatives, have contributed to the uplift in wages of lower-income employees. The increase in wages of lower-income employees did not have a significant impact on cost competitiveness, as they only form a very small component of total business costs.

All industries continued to see wage growth in 2024

8. Wage growth was observed across all industries, though the extent of increases varied. Administrative & Support Services reported the highest growth (8.7%), largely due to the Progressive Wage Model (PWM). Above-average increases were also seen in Financial Services (6.7%) and Community, Social & Personal Services (5.7%), amid continued demand for skilled workers10. In contrast, Food & Beverage Services recorded below-average growth (4.8%), reflecting a weaker economic performance for the sector. Wage increases in Wholesale Trade (4.2%) and Manufacturing (5.1%) were also below average and are expected to moderate in the coming year, given the on-going geopolitical and trade tensions.

The proportion of establishments which have fully adopted the Flexible Wage System (FWS) remained low

9. While 76.0% of establishments have implemented at least one FWS component in 2024, the overall trend has been one of gradual decline over the past decade. In addition, only 8.5% of firms had fully adopted both the Monthly Variable Component (MVC) and Annual Variable Component (AVC), and the prevalence of variable wages in private sector establishments was also low (14.9% of total wages). Establishments that have implemented at least one FWS component were more likely to have given wage increases by using the variable wage components. More establishments should implement the FWS to allow them to offer competitive wages and still be able to adapt to changing economic conditions and market fluctuations.

Conclusion

10. In its 2024/2025 guidelines, the National Wages Council provided guidance to establishments on sustainable wage increases that are commensurate with increases in firms’ productivity and reflect workers’ contributions. The Government urges establishments to press on with business and workforce transformation, and to make full use of Government programmes to remain competitive and resilient. The Government also encourages establishments to adopt more flexible wage structures to enable quick adjustments during downturns to sustain their businesses by cutting costs rather than jobs, as well as to reward good performance during upturns to retain talent. Establishments can refer to the FWS Guidebook (https://go.gov.sg/fwsguidebook) to better understand FWS and its implementation or approach tripartite partners and the Tripartite Alliance for Fair & Progressive Employment Practices (TAFEP) for advice.

For More Information

11. The “Report on Wage Practices 2024” is released by the Manpower Research and Statistics Department, Ministry of Manpower. The full report is available online at https://stats.mom.gov.sg.

12. For data requests and queries pertaining to the report, please reach out to the Ministry of Manpower’s Research and Statistics Department at mom_rsd@mom.gov.sg.

FOOTNOTE

  1. The Singapore economy expanded by 4.4% in 2024, faster than the 1.8% expansion in 2023. Source: Ministry of Trade and Industry.
  2. The unemployment rates remained low and stable in December 2024 (overall: 1.9%; resident: 2.8%; citizen: 2.9%). Source: Labour Force Survey, Manpower Research & Statistics Department, MOM.
  3. The proportion of firms with an intention to raise wages in the next three months declined from 32% in December 2024 to 22% in March 2025. Source: Manpower Research & Statistics Department, MOM.
  4. Total wage includes components such as the basic wage and annual variable component.
  5. Residents refer to Singapore Citizens and Permanent Residents.
  6. Inflation eased to 2.4% in 2024, from 4.8% in 2023. Source: Department of Statistics.
  7. From 2016 to 2024, real mean gross monthly income (including employer CPF contributions and excluding bonuses) of employed residents increased by 1.2% per annum, while labour productivity (measured by real value added per worker) grew by 2.0% per annum. Source: Comprehensive Labour Force Survey, Manpower Research & Statistics Department, MOM (for mean income), and Singapore Department of Statistics (for labour productivity).
  8. Among establishments that have provided more wage increases to RAF and Junior Management employees, most reported that they have done so to help RAF and Junior Management employees cope with the higher cost of living.
  9. Since 1 July 2024, the Local Qualifying Salary has been raised from $1,400 to $1,600 per month. Firms hiring foreign workers will have to pay all their full-time local workers at least the Local Qualifying Salary (or Progressive Wage Model wages where applicable).
  10. Financial & investment advisers, registered nurses and teaching & training professionals are amongst the most sought after. Source: Job Vacancies 2024, Manpower Research & Statistics Department, MOM