National Wages Council Guidance: Impact on Salary Increases, Bonuses and Pay Equity in Singapore

Every year, the National Wages Council (NWC) releases salary recommendations that guide employers across Singapore on pay increments, bonuses and one-off payments. Although these guidelines are not legally binding, they remain highly influential in both the public and private sectors.

What is the National Wages Council?

Established in 1972 during a period of rapid industrialisation, the NWC was created to ensure a balanced, stable approach to wage-setting. It is a tripartite body comprising employers, workers and the Government, bringing together stakeholders such as the Ministry of Manpower (MOM), the National Trades Union Congress (NTUC) and leading employer groups.

The council evaluates Singapore’s economic competitiveness, labour market conditions, inflation, productivity trends and global outlook before issuing its annual wage guidelines. During crises — such as the COVID-19 pandemic — it may convene more than once a year.

Do companies need to follow NWC recommendations?

Technically, no. NWC guidelines are advisory rather than enforceable. However, their influence is significant:

The civil service, Singapore’s largest employer, regularly references NWC guidance when announcing pay adjustments and bonuses.

Lower-wage workers often receive one-off support payments based on NWC recommendations.

Private-sector employers frequently benchmark their budgeted salary increments and bonuses against the NWC to ensure they are aligned with market practice.

HR practitioners acknowledge that while companies typically complete their budgeting before NWC releases its annual guidelines, they still compare their pay plans against the council’s latest recommendations to avoid falling below perceived market standards.

How does NWC support lower-wage workers?

Lower-wage workers remain a central focus of the NWC. The council specifies recommended wage ranges and sets job ladders under the Progressive Wage Model (PWM), aimed at narrowing income gaps and improving long-term career progression.

Companies that employ workers under PWM schemes must already comply with minimum basic wages and training requirements. In these cases, the NWC serves as a “final reference point” to ensure alignment with PWM structures.

How many companies adopt NWC guidelines?

The NWC monitors adoption through MOM’s annual wage survey. In 2024:

• 26.2% of establishments adopted the recommended pay increments for lower-wage workers

• Awareness remained stable, with around three in five companies familiar with the guidelines

• Adoption of the flexible wage system — strongly promoted by NWC — continued to grow, with 76% of firms having either a monthly or annual variable component

Flexible wage components help employers adjust pay during downturns while rewarding workers during upturns, strengthening overall labour market resilience.

If NWC guidelines are not enforceable, why do they matter?

NWC recommendations matter because:

Unions use them as a negotiation benchmark during collective bargaining

Workers refer to them when questioning increments or bonuses

Employers rely on them for signalling, ensuring their pay decisions reflect broader national expectations

Smaller businesses use NWC guidelines as a practical reference when reviewing pay without dedicated HR expertise

Industrial mediation and arbitration consider NWC recommendations as a credible anchor point

Ultimately, even firms that do not explicitly follow the guidelines tend to move with the market — which is often shaped by companies that do.

How does NWC compare internationally?

Singapore’s NWC is unique for its national, tripartite approach. Elsewhere:

• The UK’s Low Pay Commission recommends minimum wage levels

• Malaysia and Indonesia have national wage councils advising on minimum wages

• Thailand’s wage committee determines minimum daily wages

• Australia sets wage decisions through the Fair Work Commission