Real wages rise 4% in 2025 as inflation eases

About 83.1% remained profitable, supporting continued wage increases.

Real wages in Singapore grew 4% in 2025, up from 3.2% in 2024, as easing inflation lifted workers’ purchasing power despite slower nominal wage growth, according to the Ministry of Manpower (MOM).

Total nominal wages, including employer CPF contributions, for full-time resident employees who stayed with the same employer for at least one year rose 4.9% in 2025, down from 5.6% in 2024.

“The moderation coincided with easing inflation, which may have reduced upward pressure on firms to raise nominal wages,” the ministry said.

About 83.1% of establishments were profitable in 2025, up from 80.8% in 2024.

At least 64.1% of firms also reported stable or improving profitability, broadly similar to the previous year.

Meanwhile, loss-making firms declined to 16.9%, down from 19.2% in 2024, with smaller firms more likely to report losses compared to larger enterprises.

Whilst most establishments still raised wages, there were signs of increased prudence. The share of establishments granting wage increases fell to 72.4% in 2025, from 78.3% in 2024, whilst those keeping wages unchanged rose to 24.5%.

Amongst firms that raised pay, the average increase was 5.8%, with employee retention cited as the key driver. A small share of firms (3.1%) reduced wages, with an average cut of 3.7%, typically among companies facing weaker performance.

All employee groups recorded positive wage growth in 2025. Rank-and-file employees saw wages increase by 4.8%, junior management recorded growth of 5.1%, whilst senior management wages rose by 4.9%.

The gap between groups narrowed, suggesting more evenly distributed wage gains.

Across industries, wage growth remained positive but generally slower than in 2024. Administrative & support services led at 7.5%, supported by wage frameworks such as the Progressive Wage Model and Local Qualifying Salary requirements.

Financial services (5.9%) and insurance services (6.6%) also posted strong gains amid continued demand for skilled professionals.

However, some sectors saw sharper slowdowns. Accommodation eased to 3.9% from 5.5% the year before, whilst construction moderated to 4.0%.

“Overall, Singapore’s labour market continued to experience positive wage growth in 2025 amid favourable business conditions and easing inflation,” the ministry said. “Although nominal wage growth moderated from the stronger pace seen in 2024, real wages improved, supporting workers’ purchasing power.”

Over the longer horizon, it noted that sustaining real wage gains will depend on productivity growth, workforce upgrading, and wage-setting practices.

The government reiterated support for guidance issued by the National Wages Council, encouraging fair and sustainable wage increases aligned with productivity.

It also urged firms to adopt the Flexible Wage System, which allows adjustments during downturns to preserve jobs. Employers can refer to the official guide here:
Flexible Wage System Guidebook

Employers are also encouraged to seek guidance from the Tripartite Alliance for Fair & Progressive Employment Practices on fair and progressive employment practices.