Salaries to rise 4% in 2026, Mercer survey shows

97.6% of Singapore firms plan 2026 salary raises

Employee salaries are expected to increase by 4% in 2026, according to a survey by global HR consulting firm Mercer, mirroring the 4.1% growth recorded in 2025.

Mercer’s Total Remuneration Survey 2025, which analysed pay trends across nearly 6,000 roles in more than 1,150 Singapore companies, found that 97.6% of employers plan to provide salary increases next year, slightly down from 99.2% in 2025.

Key factors influencing raises include individual performance, job promotions, and position within salary ranges.

Whilst base salary growth remains modest overall, sectors that leverage Singapore’s strategic strengths such as Logistics & Shipping, Aerospace, High-Tech Manufacturing, and Consumer Goods saw increases of 4.9% to 5.5%, exceeding initial budget projections.

In contrast, the High-Tech sector recorded a more modest 3% rise, below the 3.8% budgeted merit increase, due to pressures on commoditised IT and legacy system roles affected by automation and offshoring.

Specialised roles in IT augmentation including cloud computing, cybersecurity, and user acceptance testing are driving stronger pay growth, fuelled by skill shortages and strategic technology investments.

“Merit increases must also reflect the broader cost-of-living dynamics, as rising living expenses directly impact employee financial well-being. To ensure competitive and fair compensation, organisations need to consider all relevant factors including inflation and market conditions when determining salary adjustments., said Eugene Chong, Mercer Singapore’s Head of Career Products.

Looking ahead, most sectors anticipate moderate growth of 3.2% to 4.5%, with higher wage gains concentrated in industries that reinforce the country’s position as a regional business hub.

Organisations are increasingly prioritising risk management, demand forecasting, IT and data augmentation roles, and M&A positions to navigate economic uncertainty and sustain growth.

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