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Since the NWC guidelines on wage increases for 2026/2027 have been accepted, employers have been asked to assess wage increase possibilities in line with their own business performance.
The Singapore Government has accepted the National Wages Council (NWC) 2026/2027 Guidelines, which call on employers to provide appropriate wage increases and variable payments in recognition of employees’ contributions.
Formulated between August and October 2026, the guidelines cover the period from 1 December 2026 to 30 November 2027. They adopt a positive-leaning approach to wage increases, recognising Singapore’s stronger-than-expected economic performance alongside continued uncertainty in the economic outlook.
For lower-wage workers (LWWs), the NWC has called on employers to provide higher wage increments this year where possible, to sustain progress in narrowing the wage gap between lower-wage workers and the median worker.
Economy grows 6% in first three quarters of 2026
Based on advance estimates, Singapore’s economy grew by 6% year-on-year (y-o-y) in the first three quarters of 2026. Growth was led by sectors and segments benefiting from robust global artificial intelligence (AI)-related demand, including the electronics and precision engineering clusters within manufacturing.
In contrast, growth was slower in consumer-facing sectors, with food & beverage services experiencing a contraction.
The Ministry of Energy, Trade and Industry (METI) has projected that Singapore’s economy will grow by 4.5% to 5.5% for the whole of 2026.
Looking ahead to 2027, downside risks include a potential escalation of the Middle East conflict that could drive up energy prices and inflation, further US tariff actions, and a sudden shift in sentiment towards global AI-related capital spending.
The labour market continued to expand in the first half of 2026, with unemployment rates remaining low and stable and real incomes growing. However, retrenchments rose in the second quarter of 2026, mostly in outward-oriented sectors. The majority were attributed to business reorganisation or restructuring.
Overall labour productivity, measured by real value-added per actual hour worked, increased by 3.8% y-o-y in the first half of 2026. Overall unit labour cost (ULC) fell by 0.8% over the same period, as productivity growth outpaced the increase in labour costs per worker.
Productivity growth varied across sectors. Strong growth in manufacturing and wholesale trade contributed to declines in their ULCs, while weaker productivity growth in food & beverage services and transportation & storage was accompanied by increases in their ULCs.
Employers urged to provide appropriate wage increases
Against this backdrop, the tripartite partners have called on employers to take a positive-leaning approach to wage increases and variable payments, while calibrating adjustments to their business performance and prospects.
The Government has also recognised that uneven business conditions and continued uncertainty in the economic outlook warrant flexibility in wage adjustments.
As part of the national effort to uplift lower-wage workers, up to nine in 10 full-time lower-wage workers currently benefit from the Progressive Wage Model (PWM), Local Qualifying Salary (LQS) and/or Progressive Wage Mark (PWMark) accreditation scheme.
The NWC’s recommendations seek to provide meaningful wage increases for lower-wage workers while allowing employers flexibility based on economic and business conditions.
To support employers in raising wages, the Government has extended the Progressive Wage Credit Scheme (PWCS) until the end of 2028. Employers that provide wage increases to eligible lower-wage workers can receive transitional support, enabling them to invest in workforce and enterprise transformation so that wage increases remain sustainable.
The Government will work with the labour movement, the Singapore National Employers Federation (SNEF), and Trade Associations and Chambers to raise awareness of the NWC’s wage guidelines for lower-wage workers and encourage employers to adopt them.
Productivity and skills remain key to sustainable wage growth
To ensure wage growth remains sustainable and supported by productivity growth, the Government has called on employers to continue transforming their businesses and workforce, while employees continue to reskill and upskill.
Employers are encouraged to redesign jobs and invest in their employees so they can thrive in an AI-enabled economy.
The Government will continue working with tripartite partners to champion fair, inclusive and sustainable wage growth, while ensuring that businesses remain productive and competitive.
Read the full NWC 2026/2027 Guidelines here.
ALSO READ: Singapore's economy grew 5.4% in Q3 2026, down from 6.2% in Q2
Infographic / Ministry of Manpower
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