Salary & Benefits 2026: What Singapore Employers Should Budget For

ManagementNovember 01, 2025 10:00

Image representing salary growth and workforce planning in 2026.

This article is written in English for readers in Singapore. Chinese and Japanese translations are available on our website. 

Singapore’s Wage Growth Enters a New Phase

As Singapore moves toward 2026, companies face a tightening labour market and shifting employee expectations. Inflation has cooled compared to 2023’s highs, yet wage pressures persist — particularly in technology, manufacturing, and professional services.

According to Aon’s Asia Salary Increase Survey 2025, Singapore employers project an average salary increase of about 4.3% in 2026, slightly higher than 2025’s 4.1%. This keeps Singapore among the top three ASEAN economies with the strongest pay momentum, alongside Vietnam and Malaysia.

However, the structure of pay is changing. Beyond base salary, employers are budgeting more for skills-based allowances, hybrid work support, and wellness programmes, reflecting the new expectations of a post-pandemic workforce.

Key Salary Trends for 2026

1. Skills premiums outpace general increments

Specialised roles in AI engineering, cybersecurity, and green energy command salary jumps of 8–12%, well above the national average of 4%. Many employers are moving to differentiated pay structures that reward high-demand skills rather than tenure.

2. Sector differentials stabilise

After two volatile years, increments are normalising across industries. Aon’s 2025 survey shows Life Sciences leading with 4.6% projected growth, while Energy lags at 3.5%. Most other sectors hover near the national average of 4.3%, reflecting steady confidence across Singapore’s economy.

3. Shift from bonuses to benefits

Companies are slightly trimming bonus pools and redirecting budgets into well-being, flexible work, and retention programmes, according to Aon’s 2026 planning guidance. The emphasis is moving from one-off rewards to long-term engagement and loyalty.

4. SMEs remain cautious

Smaller firms generally plan below-average adjustments, citing cost pressures and conservative growth forecasts. To remain competitive, many are investing instead in learning stipends, internal recognition, and flexible schedules that boost morale without large cash outlays.

5. Inflation-adjusted wage growth holds steady

With core inflation projected at 0.5–1.5% for 2026 (Monetary Authority of Singapore), real wage growth should remain positive — a healthy sign of economic resilience and sustained hiring activity.

What Employers Should Budget For

Category 2025 Status 2026 Outlook What to Prioritise
Base Salary ≈ 4.1% ≈ 4.3% (Aon) Focus raises on critical roles and skills retention.
Bonuses Volatile by sector Slight moderation Tie to measurable KPIs and communicate criteria early.

Benefits

 Expanding Growing share of total rewards Strengthen wellness, hybrid work, and family-care support.

Upskilling Budget

 Varied Rising allocations Use SkillsFuture and in-house academies to future-proof talent.
Pay Transparency Increasing More roles with posted ranges Publish pay bands and educate hiring managers.

These benchmarks draw from Aon, MOM, SkillsFuture Singapore, and Reeracoen internal insights.

Compensation Beyond Pay: The “Total Rewards” Model

Compensation strategies are shifting from cost-based to value-based design. Progressive employers are adopting a Total Rewards model that integrates:

  • Career mobility opportunities across functions or regions
  • Learning pathways linked to SkillsFuture credits
  • Flexible work arrangements and wellness days
  • Recognition and community-based perks

This holistic model supports retention and strengthens employer branding while aligning with Singapore’s Workplace Fairness and SkillsFuture frameworks.

How Reeracoen Helps Employers Benchmark & Plan

At Reeracoen Singapore, we help clients design competitive and sustainable pay strategies through:

Our role goes beyond recruitment — we act as your workforce intelligence partner.

Key Takeaway

Budgeting for 2026 isn’t just about matching market rates — it’s about anticipating what employees truly value.

Companies that combine fair pay, growth pathways, and well-being benefits will build loyalty and attract the best talent in Singapore’s evolving labour market.

 

🔍 FAQ: Salary Planning & Pay Trends 2026

Q1. What’s the projected average salary increase in Singapore for 2026?

Around 4.3%, based on Aon’s Asia Salary Increase Survey 2025.

Q2. Which sectors will offer the highest pay growth?

Technology, Life Sciences, renewable energy, and advanced manufacturing.

Q3. How can smaller companies stay competitive?

By focusing on flexible benefits, skill development, and strong culture fit to offset smaller raises.

Q4. Should companies revise pay mid-year if inflation spikes?

Many Singapore employers now conduct mid-year pay reviews when market conditions shift to retain key talent.

 

Benchmark your pay structure today. Book a consultation with our HR specialists.

Need help designing compensation plans? Submit your Job Description here.

 

✅ Final Author Credit
By Valerie Ong (Regional Marketing Manager, Reeracoen Singapore) 
Published by Reeracoen Singapore — a leading recruitment agency in APAC.

 

🔗 Related Articles: 

📚 References

 

Article Banner

 

Disclaimer:

The information provided in our blog articles is intended for general informational purposes only. It is not a substitute for professional advice and should not be relied upon as such. 

While we strive to provide accurate and up-to-date information, the ever-evolving nature of certain topics may result in content becoming outdated or inaccurate over time. Therefore, we recommend consulting with qualified professionals or experts in the respective fields for specific advice or guidance. Any actions taken based on the information contained in our blog articles are solely at the reader's discretion and risk. We do not assume any responsibility or liability for any loss, damage, or adverse consequences incurred as a result of such actions.

We may occasionally provide links to external websites or resources for further information or reference. These links are provided for convenience and do not imply endorsement or responsibility for the content or accuracy of these external sources. Our blog articles may also include personal opinions, views, or interpretations of the authors, which do not necessarily reflect the views of our organisation as a whole. We encourage readers to verify the accuracy and relevance of information presented in our blog articles and to seek professional advice when needed. Your use of this website and its content constitutes acceptance of this disclaimer.

Related Post