NWC Guidelines 2026/2027: Pay Rises for Lower-Wage Staff

The NWC guidelines 2026/2027, which the Government accepted on 19 October 2026, recommend a built-in raise of 6.0% to 8.0%, or a minimum of S$120 to S$170, for staff earning up to S$2,800 a month, depending on how the business has done. The National Wages Council's guidelines cover 1 December 2026 to 30 November 2027, so an SME setting December or January increments should pick its category now.

The figures are recommendations, not law. The budgeting catch is a separate rule: from 2027 the Progressive Wage Credit Scheme (PWCS) co-funds a raise only if it lifts average monthly pay by at least S$200, and every NWC dollar floor sits below that.

What do the NWC guidelines 2026/2027 recommend?

The full NWC 2026/2027 guidelines (PDF) set four categories for lower-wage workers:

1. Done well, positive prospects: the higher end of 6.0% to 8.0%, or at least S$135 to S$170, whichever is higher.
2. Done well, uncertain prospects: around the middle of 6.0% to 8.0%, or at least S$135 to S$170, whichever is higher.
3. Not done well, still profitable: the lower end of 6.0% to 8.0%, or at least S$120, whichever is higher.
4. Not done well and unprofitable: at least S$120.

Firms that did particularly well should consider more. For part-timers the percentage applies but the dollar minimum does not. "Gross monthly wage" means basic pay, allowances, productivity incentives and overtime, including the employee's CPF share but not employer CPF, the Annual Wage Supplement (AWS) or bonuses.

For other staff the NWC sets a posture, not numbers, from built-in increases plus variable payments to wage restraint "with management leading by example". It again urges the Flexible Wage System, with variable pay at 30% of a rank-and-file employee's annual basic wage package (10% monthly, 20% annual including AWS; see our guide to the AWS and CPF on year-end bonuses).

What changed from last year?

Compared with the 2025/2026 guidelines (PDF), which the Government accepted on 11 November 2025:

• The threshold rose from S$2,700 to S$2,800, about the 20th percentile wage of full-time employed residents in 2025.
• The range moved from 5.5% to 7.5% up to 6.0% to 8.0%, and the floor for firms that did well from S$105 to S$125 up to S$135 to S$170.
• "Done well, uncertain prospects" moved from the middle to lower end to around the middle.
• Firms that did not do well had no dollar floor last year; now they have S$120, and unprofitable firms have their own category.

Which category is your business in?

The NWC gives indicators. Done well can mean meeting targets, revenue or productivity growth, business volume, order books or internal KPIs; positive prospects can mean a healthy order book or pipeline, or plans to invest, expand or hire. Unprofitable has a precise test: total expenses exceed total income, counting operating and non-operating income.

MOM's release says growth in the first three quarters of 2026 was uneven: AI-related demand lifted electronics and precision engineering while food and beverage services contracted, so a café and a component supplier can land in different categories.

Why does a S$200 raise matter in 2027?

The Progressive Wage Credit Scheme co-funds raises for Singapore citizen and permanent resident employees on wages up to S$3,000 a month. For 2027 it pays 30% of the qualifying increase, but only if the average gross monthly wage rises by at least S$200 (S$100 until 2026). The credit arrives by the first quarter of the next year, and a qualifying 2027 raise that is kept is co-funded again in 2028 at 20%.

Three details change the sums:

• IRAS compares yearly averages. Its gross monthly wage is a calendar year's total pay, including overtime and bonuses, divided by the months CPF was paid. By our arithmetic, a S$200 raise from 1 December 2026 lifts the 2026 average by about S$17, so 2027 shows about S$183 and misses the bar; it takes S$219 from December, or S$200 from January. Test your case with IRAS's PWCS calculator.
• Bonuses count. A smaller 2027 bonus can cancel part of a raise.
• Qualifying 2026 raises carry over. A raise that qualified in 2026 and is kept is still co-funded in 2027, even if it was under S$200.

PWCS is support, not a pay rule, and IRAS says PWCS eligibility does not affect your foreign worker quota. Firms that hire foreign workers must still pay PWM wages to covered locals and at least the Local Qualifying Salary (S$1,800 for full-time staff) to other locals.

Worked example: four operators, three ways to raise pay (illustrative)

A fictional precision-engineering workshop run by Farah has four operators, all Singapore citizens aged 55 and below, on S$1,900, S$2,200, S$2,500 and S$2,800 a month, with overtime and bonuses unchanged between 2026 and 2027. The firm did well but its export customers face tariff uncertainty, so Farah uses category 2 (we take 7.0% as the middle). Raises start on 1 January 2027.

1. Guideline figures. At 7.0% the raises are S$133, S$154, S$175 and S$196. The floor lifts the first to S$135 to S$170 and the second to S$154 to S$170. The guidelines do not say where in that range to land, so we price both ends.
2. Plan A, bottom of the range: S$660 a month, S$7,920 for 2027. Employer CPF at 17%, this age band's rate in CPF Board's tables for 2026 and from 1 January 2027, adds S$1,346.40 (CPF's rounding shifts each total by under S$25 a year). No raise reaches S$200, so no PWCS. Cost: S$9,266.40.
3. Plan B, top of the range: S$711 a month, S$8,532 a year, plus S$1,450.44 CPF and no PWCS. Cost: S$9,982.44.
4. Plan C, S$200 each: S$800 a month, S$9,600 a year, plus S$1,632 CPF. Every raise qualifies, so PWCS pays 30% × S$200 × 12 months × 4 = S$2,880 by early 2028. Net cost: S$8,352.
5. Tax on the payout. IRAS treats the payout as taxable revenue. Even taxed at the full 17% corporate income tax rate (S$489.60), Plan C costs S$8,841.60: S$424.80 less than Plan A, with each operator S$4 to S$65 a month better off. Only the payout is taxed here; the payroll figures are before tax.

This holds only if each raise clears S$200 in IRAS's averages. Our CPF contribution calculator covers other age bands.

What else should you budget for in 2027?

• Older workers' CPF. Employer rates for workers above 55 to 65 rise by 0.5 percentage points on 1 January 2027, partly offset for 2027 by a CPF Transition Offset; the NWC says employers may weigh this when sizing raises. See our CPF contribution rates 2027 guide.
• Training. A redesigned SkillsFuture Enterprise Credit starts on 1 December 2026 with a fresh S$10,000, the guidelines say; our SkillsFuture Enterprise Credit guide covers the current credit's 30 November end.
• PWM wages. If any staff fall under a PWM, start with our Progressive Wage Model checklist.

Checklist before you set December or January pay

1. List staff with a gross monthly wage up to S$2,800 on the NWC definition.
2. Choose your category and file the evidence (accounts, order book, hiring plans).
3. Work out each person's percentage and dollar figure, and use the higher.
4. For residents earning up to S$3,000, check each raise clears S$200 in IRAS's yearly average.
5. Price each option with employer CPF, counting the PWCS payout as taxable revenue arriving by early 2028.
6. Confirm PWM and LQS wages are met, then put the new pay in writing before its first payday.

More employer routines are under operations.

Common questions