Singapore’s NWC Guidelines 2025/2026: What HR should know

Employers who have done well and have positive business prospects may provide lower-wage workers with a wage increase of 5.5-7.5% or S$105-S$125, whichever is higher.

The Singapore government has accepted the National Wages Council 2025/2026 Guidelines, which will take effect from 1 December 2025 to 30 November 2026.

Similar to previous editions, this year's guidelines covers three focus areas:

• Fair and sustainable wage increases
• Sustained wage growth for lower-wage workers
• Transforming jobs and upskilling the workforce

Here’s what HR professionals and enterprises should prioritise in these areas:

Wage increases should be fair and sustainable, and employers should adopt the flexible wage system (FWS)

Recognising the sustained growth in productivity over time, NWC urges employers to share these rewards with their workforce through fair and sustainable wage increases. This approach ensures employees benefit from improvements in labour productivity.

In accordance with the principles of the Flexible Wage System (FWS), built-in wage increments should reflect future business prospects, while variable components should be tied to past performance and individual contributions. Employers should also review market benchmarks regularly to keep wages competitive.

Given global economic uncertainty, including risks from US tariffs and international responses, wage flexibility is critical. NWC urges all employers to fully implement the FWS, which includes both the Annual Variable Component (AVC) and Monthly Variable Component (MVC).

The FWS allows companies to manage costs during downturns without resorting to layoffs and to adjust wages quickly during upturns to retain talent.

Based on these principles, NWC has outlined the following guidelines for employers:

1. All employers should adopt the FWS to enhance their resilience and manage rising costs given the uncertainties ahead.
2. Employers who have done well and have positive business prospects should reward their employees with built-in wage increases and variable payments (e.g., AVC/bonuses, one-off payments) commensurate with the employers’ performance and employees’ contributions.
3. Employers who have done well but face uncertain business prospects may exercise moderation in built-in wage increases but should still reward employees with variable payments commensurate with the employers’ performance and employees’ contributions.
4. Employers who have not done well may exercise wage restraint, with management leading by example. These employers should make greater efforts to improve business processes and productivity, especially by investing in upskilling their employees. Employers who have not done well but face positive business prospects may also consider setting out future variable payments that are linked to appropriate business indicators.

Increase in CPF monthly salary ceiling

From 1 January 2026, the CPF monthly salary ceiling will rise from S$7,400 to S$8,000 to reflect increasing wages. Employer CPF contribution rates for workers aged above 55 to 65 will also go up by 0.5 percentage points. To ease this transition, the Government will provide a CPF Transition Offset to partially cover the higher employer contributions. Employers may factor these increased CPF costs into decisions on wage adjustments.

The NWC also highlighted two key trends: an ageing workforce and more diverse work patterns. To support longer careers and flexible work arrangements, the Council is reviewing its Guidelines to better account for skills, contributions, and varying workloads. This review aims to make the Guidelines future-ready and is targeted for completion by 2026.

Pressing on with sustained wage growth for lower-wage workers (LWWs) 

Since the Tripartite Workgroup on Lower-Wage Workers (TWG-LWW) introduced the renewed Progressive Wage strategy to narrow the wage gap with median workers while ensuring business sustainability, all its recommendations have been implemented.

Today, up to nine in 10 full-time LWWs benefit from measures such as the Progressive Wage Model (PWM), Local Qualifying Salary (LQS), and the Progressive Wage Mark accreditation scheme.

This year, taking into account the economic outlook and historical median income growth of 4.2% p.a. between 2016-2024, the NWC recommends the following guidelines for employees earning a gross monthly wage up to S$2,700:

1. Employers who have done well and have positive business prospects should provide their lower-wage workers with a built-in wage increase at the higher end of 5.5-7.5% of gross monthly wage, or a wage increase of at least S$105-S$125, whichever is higher.
2. Employers who have done well but face uncertain prospects should provide their lower-wage workers with a built-in wage increase at the middle to lower end of 5.5-7.5% of gross monthly wage, or a wage increase of at least S$105-S$125, whichever is higher.

With some employers facing economic difficulties, the NWC thus recommends that:

1. Employers who have not done well should provide their lower-wage workers with a built-in wage increase at the lower end of 5.5-7.5% of gross monthly wage. If business prospects subsequently improve, employers should consider further wage increases.

In addition to the above, the NWC acknowledges that among LWWs, some earn significantly less. In line with the TWG-LWW’s recommendation for stronger wage growth for the lowest-paid, the Council urges employers to grant higher percentage increases to those earning comparatively lower wages.

Employers should ensure sustained basic wage growth for these workers. Service buyers and providers are encouraged to adopt outcome-based contracting and allow contract values to be adjusted where possible. This supports the implementation of LWW wage guidelines, PWMs, and productivity improvements.

Occupational Progressive Wages (OPW)

In line with the TWG-LWW’s recommendations, the NWC has enhanced the OPW job ladders and set wage increases intended to support OPW employees in gaining ground with the median wage level, while bearing in mind the uncertain economic conditions ahead. The recommendations support meaningful uplifting of LWWs in OPW jobs:

1. The updated job ladders and higher 2026-2027 Administrator OPW wage requirements will apply to about 44,700 full-time resident LWWs in firms that employ foreign workers. Of these, about 43,800 were earning below the stipulated 2026 OPW wage requirement in 2024, and can expect to see a wage increase from 1 July 2026.
2. The Driver occupational group is currently categorised into two job levels (General and Specialised Drivers), mainly based on the class of driving licence required. The expanded job ladders and higher 2026-2027 OPW Driver wage requirements will apply to about 12,900 full-time resident LWWs in firms that employ foreign workers. Of these, about 9,400 were earning below the stipulated 2026 OPW wage requirement in 2024, and can expect to see a wage increase from 1 July 2026.

Taken together, the recommended job ladders and higher 2026-2027 OPW wage levels will apply to about 57,600 LWWs, who are full-time resident administrators and drivers in firms that employ foreign workers. In addition to these wage levels which are intended for full-time regular contractual working hours (i.e., 35-44 hours a week), the NWC has endorsed additional overtime wage requirements.

"Training remains key to improving productivity and ensuring sustainable wage increases. With the proliferation of digital technology and Artificial Intelligence (AI), it is critical that employers and LWWs stay adaptable and invest in transformation and their human capital."

Pressing on with transforming jobs and upskilling the workforce 

With rapid technological advancements transforming jobs, the NWC calls on employers to transform their businesses to keep up with the evolving environment, as well as for workers to continuously upskill themselves to remain relevant.

"This would allow us to leverage AI and other technological advancements positively to grow our economy, help business to thrive and create good jobs for Singaporeans in our next bound of growth."

The NWC recommends that employers do the following:

1. Employers are encouraged to adopt a proactive approach to reskill and upskill existing employees in preparation for changes in job functions and provide support for employees to initiate training.
2. Redesign jobs in tandem with business transformation to increase productivity.
3. The NWC urges employers to set aside adequate budget for continuous education and training.
4. Strengthen HR capabilities to support transformation.

For employees, the NWC encourages them to play an active role in their career planning and identifying opportunities to acquire in-demand skills. Furthermore, employers and employees are also highly encouraged to engage in structured career conversations to align career aspirations with business needs and identify reskilling or upskilling opportunities.

Who do these guidelines apply to?

These guidelines apply to all employees across unionised and non-unionised firms, in both the public and private sectors. This includes professionals, managers, executives, technicians (PMETs), rank-and-file workers, broad middle-income earners, LWWs, and re-employed employees. They cover both full-time and part-time roles, and where relevant, platform workers.

When implementing these recommendations, employers should share relevant information—such as company wage data, business performance, and future outlook — with unions to facilitate constructive wage negotiations.

Employers are encouraged to seek guidance from the Singapore National Employers Federation (SNEF), trade associations and chambers, NTUC, and unions. SMEs may also approach the three ethnic chambers — the Singapore Chinese Chamber of Commerce and Industry, Singapore Malay Chamber of Commerce and Industry, and Singapore Indian Chamber of Commerce and Industry — for support in applying the guidelines.

"The NWC is confident that efforts to raise productivity and skills will continue to enable sustainable wage growth and a better standard of living for Singaporeans, while sharpening the competitiveness of our workforce and businesses.

"The NWC urges all employers, unions, and the Government to continue working together to secure a brighter future for all."

Lead image / FWS Guidebook 

Infographics / NWC Guidelines