Government accepts the NWC Guidelines for 2025-2026

The Government accepts the National Wages Council (NWC) 2025/2026 Guidelines.

2 The labour market remained resilient in the first half of 2025, with employment growing for both residents and non-residents. Unemployment rates and retrenchments remained low, and real income rose. However, there were some signs of the labour market softening - job vacancies declined, and business sentiments softened.

3 Meanwhile, overall labour productivity, as measured by real value-added per actual hour worked, rose by 2.9% on a year-on-year (y-o-y) basis in the first half of 2025. Over a longer period from 2016 to 2024, overall labour productivity grew by 2.5% per annum, supporting average real income growth of 1.3% per annum over the same period. Additionally, overall unit labour cost fell by 0.2% on a y-o-y basis in the first half of 2025 as labour productivity growth, as measured by real value-added per worker, outstripped the increase in total nominal labour cost per worker. This underscores the benefits of business and workforce transformation in sustaining productivity-driven growth with commensurate wage increases.

4 Based on advance estimates, the Singapore economy grew by 2.9% y-o-y in the third quarter of 2025, moderating from the 4.5% growth in the previous quarter. For the rest of the year, GDP growth is expected to continue to slow on the back of a further moderation in the growth of outward-oriented sectors, partly due to the impact of the US tariffs on global demand. The Ministry of Trade and Industry (MTI) has projected that the Singapore economy will expand by 1.5% to 2.5% for the whole of 2025. Looking ahead to 2026, Singapore’s GDP growth is likely to remain weighed down by weak global demand as the US tariffs are expected to continue to dampen global growth and trade. At the same time, significant uncertainties remain in the global economy, with the risks tilted to the downside. These include the possibility of further tariff actions leading to a renewed spike in economic uncertainty and potential escalations in geopolitical tensions.

5 The Government stands with tripartite partners to call on employers to reward employees with wage increases and variable payments that are fair and sustainable. Employers should take into account productivity growth over the longer term and the broader economic outlook when assessing wage adjustments this year.

6 At the same time, all employers should adopt the Flexible Wage System (FWS) to maintain wage flexibility during adverse business conditions to sustain their businesses by cutting costs rather than jobs. Conversely, the FWS also allows quick adjustments of wages during an upturn to retain talent. Employers who need support to implement the FWS can refer to the FWS Guidebook and approach tripartite partners and the Tripartite Alliance for Fair & Progressive Employment Practices for advice.

7 To ensure sustainable wage growth, the Government calls on employers to press on with efforts to transform their businesses and workforce, and employees to continue reskilling and upskilling. This can help businesses and workers keep up with the rapid technological changes in areas such as Artificial Intelligence (AI). Employers and employees can tap on various enterprise grants, as well as jobs and skills programmes provided by Government agencies.

8 As part of our social compact, we must press on with the national effort to uplift lower-wage workers so that every worker enjoys the fruits of Singapore’s growth. In August 2021, the Tripartite Workgroup on Lower-Wage Workers recommended a renewed Progressive Wage strategy to uplift lower-wage workers and sustainably narrow the income gap with the median wage worker. Today, up to 9 in 10 full-time lower-wage workers benefit from the Progressive Wage Model, Local Qualifying Salary, and/or Progressive Wage Mark accreditation scheme.

9 The NWC’s recommendations for lower-wage workers balance meaningful wage increments with business sustainability and will bolster ongoing efforts to narrow the income gap. The updated Occupational Progressive Wages (OPW) job ladders and 2026-2027 wage schedule will apply to about 57,600 full-time lower-wage workers in Administrator and Driver occupations. Of these, about 53,200 (92.2%) were earning below the stipulated 2026 OPW wage requirement in 2024. Eligible employers will automatically receive co-funding support for wage increases for lower-wage workers under the Progressive Wage Credit Scheme until 2026. This will alleviate cost pressures, while enabling businesses to drive transformation efforts to enhance productivity and raise wages sustainably.

10 The Government will continue to work with tripartite partners to champion fair, inclusive and sustainable wage growth for our workers, as recommended by the NWC, while ensuring that our businesses stay productive and competitive.