Singapore workers saw stronger gains in purchasing power in 2025 as real wages continued to grow amid easing inflation and improving business profitability, according to the latest “Report on Wage Practices 2025” released by the Ministry of Manpower.
The report showed that nominal total wages, including employer CPF contributions, for full-time resident employees who stayed with the same employer for at least one year increased by 4.9% in 2025. While this marked a moderation from the 5.6% increase recorded in 2024, wage growth remained broadly consistent with historical trends.
After adjusting for inflation, real wages grew by 4.0% in 2025, up from 3.2% the previous year, indicating that workers experienced stronger purchasing power gains as inflationary pressures eased.
The Ministry said the moderation in nominal wage growth coincided with softer inflation, which reduced pressure on companies to implement larger salary adjustments. Over the medium term, the government noted that productivity growth continues to support sustainable real wage increases.
Business conditions also improved across Singapore in 2025, with 83.1% of establishments reporting profitability, compared to 80.8% in 2024. At the same time, the proportion of firms reporting losses fell to 16.9% from 19.2% a year earlier. Smaller firms with fewer than 200 employees were more likely to experience losses compared to larger companies.
Despite stronger profitability, employers appeared more cautious in their compensation strategies. While 72.4% of establishments granted wage increases in 2025, this was lower than the 78.3% recorded in 2024. More firms chose to keep wages unchanged, rising from 18.5% to 24.5% over the same period.
Among firms that raised salaries, average wage increments stood at 5.8%, with employee retention emerging as the most common reason for wage adjustments. Only 3.1% of establishments reduced wages, with affected firms citing weaker business performance and implementing average wage cuts of 3.7%.
The report also showed that wage growth remained positive across all employee groups, including rank-and-file workers, junior management, and senior management staff. Differences in wage growth across these groups narrowed in 2025, pointing to more broad-based gains across the workforce.
Sector-wise, Administrative and Support Services recorded the strongest wage growth at 7.5%, supported by Singapore’s Progressive Wage Model and Local Qualifying Salary requirements. Financial Services and Insurance Services also posted relatively strong wage growth due to sustained demand for professionals and executives.
Meanwhile, sectors such as Accommodation and Construction experienced slower wage growth as hiring demand stabilised following post-pandemic recovery surges in earlier years.
Looking ahead, the Ministry of Manpower expects real wage growth to remain positive in 2026, although companies are likely to remain measured in wage increases amid geopolitical uncertainties and persistent inflation risks.
The government reiterated that sustainable wage growth over the longer term will depend on productivity improvements, workforce upgrading, economic conditions, and responsible wage-setting practices. It also encouraged employers to adopt the Flexible Wage System to help businesses manage costs during economic downturns while preserving jobs.