On May 28, 2026, Singapore’s Ministry of Manpower (MOM) released its annual
“Report on Wage Practices 2025“.
This report summarizes wage increase rates, bonus payout statuses, and industry-specific wage trends for 2025, serving as an important reference for understanding salary trends in Singaporean companies.
In recent years, wages have continued to rise against the backdrop of inflation and a talent shortage. However, this latest report indicates that while companies still prioritize talent acquisition and retention, they are shifting toward a more cautious stance regarding wage revisions.
We receive daily inquiries from Japanese corporate clients regarding wage increase rates,
bonus levels, and offer packages. When considering salary structures, it is becoming increasingly important to understand not only overall market trends but also the specific tendencies of your own industry and job roles.
Therefore, in this month’s newsletter, based on the contents of the
“Report on Wage Practices 2025,” we introduce the key points that Japanese companies should keep in mind. We hope this will serve as a useful reference when considering future wage revisions, recruitment, and retention strategies.
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MOM Releases “Report on Wage Practices 2025”
~ Wages continue to rise, but companies shift toward a “cautious stance” ~
On May 28, 2026, Singapore’s Ministry of Manpower (MOM) released the “Report on Wage Practices 2025.”
While wages continued to rise in 2025, changes have emerged in companies’ approaches to wage increases. We have summarized key points to serve as a reference for companies considering future salary revisions and bonus structures.
Point 1
Nominal wages grew by +4.9% year-on-year, while real wages grew by +4.0% year-on-year.
For full-time resident employees (Singapore Citizens and Permanent Residents):
The nominal wage growth rate slowed from 5.6% in 2024 to 4.9% in 2025.
The real wage growth rate (after accounting for inflation) increased from 3.2% in 2024 to 4.0% in 2025.
Note: Both figures include employer CPF contributions.
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While nominal wage growth moderated slightly compared to the previous year, employees’ real incomes improved as inflation eased significantly.
From a Japanese headquarters’ perspective, this may suggest that “wage growth is finally beginning to stabilize.”
However, from the perspective of local employees, the picture is slightly different. Even as salary increases moderate, the easing of inflation has reduced the pressure from rising living costs, contributing to an improvement in real purchasing power and overall living standards.
Therefore, when reviewing salary adjustments, it is important to look beyond nominal wage growth rates and consider real wage growth as an important indicator of employees’ actual purchasing power.
*The inflation rate fell from 2.4% in 2024 to 0.9% in 2025 (Singapore Department of Statistics).
Point 2: Approximately 1 in 4 companies froze wages
In 2025, while the majority of companies implemented salary increases, a significant proportion opted to keep wages unchanged:
- 72.4% of companies increased wages
- 24.5% kept wages unchanged (wage freeze)
- 3.1% decreased wages
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Last year, 78.3% of companies implemented salary increases, meaning that the proportion of companies providing pay raises has declined.
According to MOM, this shift towards a more cautious approach is driven by geopolitical risks, inflation outlooks, and uncertainty surrounding the global economy.
As noted above, the situation is no longer one where “companies around us are increasing salaries every year.”
Therefore, rather than focusing solely on the overall salary increase rate, companies may need to place greater emphasis on differentiated salary adjustments that take individual performance and productivity into account.
Point 3: The Top Reason for Salary Increases Was Talent Retention
Among companies that implemented salary increases in 2025, the average nominal wage increase was 5.8%.
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The most common reason cited for salary increases was Employee Retention.
In Singapore, attracting and retaining skilled talent remains a key consideration when reviewing compensation. Rather than simply increasing salaries because “the market is moving upwards,” companies are increasingly taking a more targeted approach, considering “how can we appropriately reward the talent we want to retain?”
Point 4: Salary increases extended across all employee levels, not just management
In 2025, salary increases were relatively consistent across employee levels:
- Rank & File: 4.8%
- Junior Management: 5.1%
- Senior Management: 4.9%
There was no significant difference in salary increase rates across the different levels.
Compared to previous years, the trend of management receiving significantly higher salary increases has weakened, with wage growth being distributed more broadly and relatively evenly across different employee levels.
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Point 5: Financial Services Continues to See Higher Wage Increases Compared to Other Industries
In 2025, wages increased across all industries, although wage growth moderated in many sectors compared to 2024. The following trends were particularly notable.
Industries with Higher Wage Growth
- Administrative & Support Services: 7.5%
This sector includes areas covered by the Progressive Wage Model (PWM), such as cleaning, security and landscaping, where wage increases for lower-wage workers continued. Wage growth was particularly high among Rank & File employees, at 8.3%. - Insurance Services: 6.6%
Wage growth increased from 4.9% in 2024. Strong demand for specialised talent contributed to relatively high wage growth across both management and non-management employees. - Financial Services: 5.9%
Demand for specialised professionals, including financial and investment advisers, financial analysts and risk management professionals, remained strong. - Real Estate Services: 5.3% / Professional Services: 5.1%
Business-related services also recorded relatively solid wage growth, with attracting and retaining professional and management-level talent remaining an ongoing challenge.
Industries with More Moderate Wage Growth
- Manufacturing: 4.1%
In the manufacturing sector, which has a significant presence of Japanese companies, wage growth remained below the overall average of 4.9%. Growth was 3.8% among Rank & File employees and 4.4% among management employees. - Wholesale Trade: 4.4%
Wage growth increased slightly from 4.2% in 2024, making this one of the few industries where wage growth was higher than the previous year. This trend may be particularly relevant for Japanese trading and wholesale companies. - Retail Trade: 4.4% / Food & Beverage Services: 3.9%
While the Progressive Wage Model (PWM) continued to influence wages in these sectors, growth moderated compared to 2024. Labour costs for frontline and operations staff remain under upward pressure, although the pace of increase has begun to stabilise. - Accommodation: 3.9%
Following the significant wage increases seen during the post-pandemic recovery in tourism demand, wage growth in 2025 has moderated and returned closer to historical levels.
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In industries with a significant presence of Japanese companies,
Such as Manufacturing, Wholesale Trade, Professional Services, Retail, and Food & Beverage, the rapid pace of wage growth appears to be easing overall.
While salary increase rates have become more moderate, companies may still need to consider above-industry-average compensation for specialized talent in areas,
Such as Finance, HR, IT, Sales, and Regional Management, depending on market demand.
Rather than implementing a large, uniform salary increase across all employees,
It is increasingly important to adopt a differentiated approach to salary adjustments based on job function, level of responsibility, and individual performance.
Point 6: Salaries Are Expected to Continue Rising in 2026, but Companies Are Taking a “Cautious” Approach
MOM expects that in 2026:
- Real wages will continue to increase
- However, companies will remain cautious when implementing salary increases
As a result, the period of rapid wage growth seen from 2022 to 2024 is expected to ease, with companies likely to continue adopting an approach of “investing in critical talent while maintaining overall restraint in wage management.”
View the full report here:
Report on Wage Practices 2025 – MOM
That concludes this month’s newsletter feature on “Report on Wage Practices 2025.”
We hope you find the information useful as a reference when reviewing your company’s compensation and HR strategies.
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