AWS, 13th-Month Bonus and Variable Bonus in Singapore: What Is the Difference?

One offer letter promises "AWS of one month plus a variable bonus". Another mentions a "13th-month bonus and performance bonus". A third simply says "attractive bonus". Are these the same thing? Not quite, and the difference can matter when you compare offers or plan your finances.

In short: In Singapore, the Annual Wage Supplement (AWS) and the "13th-month payment" are the same thing. According to the Ministry of Manpower (MOM), AWS is a single annual payment on top of an employee's total annual wage, and it is not compulsory: whether you receive it depends on your employment contract or collective agreement. A variable bonus is a separate payment that rewards contribution or performance. It is also not compulsory unless your contract or collective agreement says so, and the amount usually varies from year to year.

Key numbers on AWS and bonuses in Singapore The average annual variable component (AWS plus variable bonus) was 1.80 months of basic wage in 2025, compared with 1.83 months in 2024 (MOM, Report on Wage Practices 2025). 73.2% of establishments paid an annual variable component in 2025, down from 74.7% in 2024 (MOM). Financial services paid the highest average, at 3.11 months, while construction paid the lowest, at 1.13 months (MOM). Variable wages made up 13.0% of total private-sector wages in 2025 (MOM).

 

What Is AWS, or the 13th-Month Bonus?

MOM describes the Annual Wage Supplement as a single annual payment on top of an employee's total annual wage. It is also known as the "13th-month payment", which is why many people call it a 13th-month bonus.

Three points about AWS are worth knowing:

• It is not required by law. MOM states that AWS is not compulsory. Whether you receive it depends on your employment contract, or the collective agreement if your company is unionised.
• Your contract sets the details. According to MOM, whether you are entitled to AWS and how it is calculated, including any pro-rating, depends on the terms of your contract.
• It can be reduced in difficult years. MOM notes that an employer can negotiate a lower AWS amount if business results are exceptionally poor for the year.

What Is a Variable Bonus?

MOM defines a bonus as a one-time payment to reward employees for their contributions to the company. Like AWS, it is not compulsory unless it is specified in the employment contract or collective agreement.

In practice, variable bonuses are often linked to individual performance, team results, company performance, or a combination of these. Some employers set a target, such as a number of months of salary, while others decide the amount each year. This is why two people in the same company can receive different bonus amounts, and why the same person may receive different amounts in different years.

AWS vs Variable Bonus: The Key Differences

	AWS (13th-month payment)	Variable bonus
What it is	A single annual payment on top of total annual wages	A one-time payment to reward contribution or performance
Required by law?	No. Depends on contract or collective agreement	No, unless specified in contract or collective agreement
How the amount is set	Set out in the contract or company terms, for example a fixed amount such as one month of basic salary	Often varies with individual, team or company performance
Predictability	Generally more predictable when stated in the contract	Generally less predictable, as it can change each year
What to check	Is it contractual? When is it paid? Is it pro-rated?	What is it based on? Is there a target? What has been paid before?

 

Note: the table summarises general practice and MOM guidance. Your own entitlement depends on the terms in your contract.

How Much AWS and Bonus Do Singapore Employers Pay?

MOM's Report on Wage Practices tracks the "annual variable component", which combines AWS and variable bonus, in months of basic wage. The averages differ widely by industry:

Industry	2024 (months)	2025 (months)
Financial Services	3.19	3.11
Transportation & Storage	2.74	2.92
Insurance Services	2.05	2.28
Real Estate Services	1.98	2.02
Wholesale Trade	1.97	1.81
Manufacturing	1.87	1.78
Information & Communications	1.39	1.63
Professional Services	1.65	1.53
Retail Trade	1.21	1.21
Construction	1.22	1.13
Overall	1.83	1.80

 

Source: MOM, Report on Wage Practices 2025, Table A3. These are industry averages; individual employers and employees may receive much more or much less.

Based on Reeracoen's observations, this matters most when you move between industries. A candidate leaving financial services, where the average variable component was 3.11 months in 2025, may find that a similar basic salary in another industry results in lower total annual cash. Comparing basic salary alone may not show the full picture.

Why the Difference Matters When You Compare Job Offers

Consider two hypothetical offers for the same role:

	Offer A	Offer B
Basic monthly salary	S$6,000	S$6,300
AWS	1 month, contractual	None
Variable bonus	None stated	Discretionary, target 1.5 months
Annual cash excluding discretionary bonus	S$78,000 (13 x S$6,000)	S$75,600 (12 x S$6,300)
Annual cash if bonus paid at target	S$78,000	S$85,050 (13.5 x S$6,300)

 

Offer B has the higher basic salary and a higher potential payout, but Offer A has more cash written into the contract. Neither is automatically better. The right choice depends on how much you value certainty, how realistic the bonus target is, and how the rest of the package compares. In Reeracoen's Beyond the Paycheque 2026 study, 47.5% of Singapore employees named base salary as the most important factor when choosing a job. This reinforces why candidates should compare basic pay alongside bonuses and other employment benefits.

Figures exclude employer CPF contributions. CPF treatment of AWS and bonuses is set by the CPF Board, so check its guidance or ask the employer if this affects your decision.

Questions to Ask Before You Accept an Offer

1. Is the AWS contractual or discretionary? If it is written into the contract, ask for the exact wording.
2. When is it paid, and is it pro-rated? Check the payment month and how the contract treats a partial first year.
3. What happens if I leave before the payment date? MOM notes that this also depends on your contract or collective agreement.
4. What is the variable bonus based on? Individual performance, company results, or both? Is there a target range?
5. What has typically been paid? An employer may not guarantee future bonuses, but a general indication of past payouts can help you set realistic expectations.

Three Common Misconceptions

• "Everyone in Singapore gets a 13th-month bonus." Not true. MOM states that AWS is not compulsory. It depends on your contract or collective agreement.
• "AWS and performance bonus are the same." They are different payments. AWS is a supplement on top of annual wages, while a variable bonus rewards contribution or performance.
• "If a bonus is mentioned in the job advert, it is guaranteed." Bonus payments are not compulsory unless specified in the employment contract or collective agreement. Check the contract, not the advert.

Find Your Next Role With Reeracoen Singapore

For professionals: Comparing offers and unsure how the bonus structure stacks up? Register with Reeracoen Singapore and speak with a specialist consultant about roles, pay and packages in your industry.

For employers: Want to present AWS and bonus terms clearly to attract the right candidates? Speak with Reeracoen Singapore's recruitment team.

Frequently Asked Questions

Is the 13th-month bonus compulsory in Singapore?

No. MOM states that the Annual Wage Supplement (AWS), also called the 13th-month payment, is not compulsory. Whether you receive it depends on your employment contract or the collective agreement between the union and your company.

Is AWS the same as the 13th-month bonus?

Yes. MOM uses "AWS" and "13th-month payment" to describe the same thing: a single annual payment on top of an employee's total annual wage. It is different from a variable or performance bonus.

Am I entitled to AWS if I have worked for less than 12 months?

It depends on your contract. According to MOM, whether you are entitled to AWS and how it is calculated, including pro-rating, depends on the terms of your employment contract or collective agreement.

Will I still receive my AWS or bonus if I resign?

It depends on your contract or collective agreement. MOM notes this also applies if you leave around the time the AWS is paid. Check your contract before deciding when to resign.

What is the average bonus in Singapore?

MOM's Report on Wage Practices 2025 shows that the average annual variable component, which combines AWS and variable bonus, was 1.80 months of basic wage in 2025. Averages differ widely by industry, from 3.11 months in financial services to 1.13 months in construction.

Related Articles

• Singapore Salary Guide 2027: How to Benchmark Your Pay Before Your Next Job Move
• Performance Reviews, Promotions & Bonuses: Is Your Career Really Growing?
• What Singapore Workers Actually Want Beyond the Paycheque in 2026 (and How to Ask for It)

About the Author

Valerie Ong

Regional Head of Marketing, Reeracoen Group

Valerie leads content and market insights for Reeracoen across Asia. She works closely with Reeracoen's specialist recruitment consultants to translate hiring data, salary benchmarks and labour market trends into practical guidance for Singapore's employers and professionals. Her work draws on Reeracoen's proprietary research including the annual Salary Guide, Hiring Pulse, and Hiring Manager Survey.

Language note: This article is published in English. Reeracoen Singapore also publishes selected content in Chinese and Japanese for our bilingual and Japanese-speaking professional community.

References

1. Ministry of Manpower. Variable wage components. https://www.mom.gov.sg/employment-practices/salary/variable-wage-components
2. Ministry of Manpower. FAQ: Am I entitled to AWS and how is it calculated? https://www.mom.gov.sg/faq/salary/am-i-entitled-to-aws-and-how-is-it-calculated
3. Ministry of Manpower. FAQ: If I've worked for a company for less than 12 months, am I entitled to an AWS, or 13th month bonus? https://www.mom.gov.sg/faq/salary/if-i-ve-worked-for-a-company-for-less-than-12-months-am-i-entitled-to-an-aws-or-13th-month-bonus
4. Ministry of Manpower. Report on Wage Practices 2025 (Table A3; Chart 10). https://stats.mom.gov.sg/iMAS_PdfLibrary/mrsd-report-on-wage-practices-2025.pdf
5. Reeracoen x Rakuten Insight. Beyond the Paycheque: Singapore Employee Sentiment Study 2026 (n=337; fieldwork October to December 2025).

 

 

Disclaimer

This article is for general information only and does not constitute legal, financial or tax advice. Entitlement to AWS and bonuses depends on your employment contract or collective agreement. For questions about your specific situation, refer to MOM, the CPF Board or a qualified adviser. Official statistics are correct as of the dates cited.