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With GDP growth in Singapore hovering around the 6% mark, it’s only natural for local incomes to follow the booming economy. In its recent report, the world’s second-largest insurance broker, Aon, projects salary growth in Singapore to reach 4.1%.
This forecast (we have to wait until after the New Year for official figures) is broadly similar to other estimates released earlier by Mercer, WTW, Korn Ferry or Robert Walters, all placing the figure at around 4%.
If these projections hold, Singapore’s gross median monthly income from work, which the Ministry of Manpower (MOM) reported at S$5,775 in 2025, could cross the S$6,000 mark this year.
In other words, half of Singapore’s workers are on track to earn S$6,000 per month or more.
But there’s a catch—nobody ever sees the full amount in their bank account.
How much is the take-home pay?
This has long been a point of contention among Singaporeans, who point out that these figures include employer CPF contributions and, therefore, do not reflect how much workers actually receive from their employers each month.
Of course, the CPF share doesn’t disappear and, unlike in most countries in the world, is reflected in the worker’s CPF accounts. It retains its financial value, even though it can only be spent on certain things.
It is also why the government reports these gross figures—to track the complete economic value that each employee receives—which is similar to how it’s done around the world (with minor methodological differences).
It would be unfair to omit it, since those funds end up paying for your home or hospital bill (and, eventually, your pension).
Nevertheless, most of us prefer to compare what we can spend at will, rather than the totality of pension, housing and medical savings.
So, let’s attempt to break down the “gross median income from work of full-time employed residents” that MOM reports, and estimate how much of that figure is left in the form of take-home pay.
The gross median income consists of the following:
- The basic salary itself
- Bonuses
- Overtime
- Other allowances, commissions, tips
- Employee’s CPF (20%)
- Employer’s CPF (17%)
The first thing to knock off this list is the employer’s CPF contribution, which is the company’s obligation. For a median total of S$6,000, that’s S$872, leaving us with S$5,128.
Employee’s CPF is next, as it’s never transferred to your bank. That’s another 20% off, or roughly S$1,026 in our example. Then there’s income tax, which comes up to S$1,126 per year, or S$94 per month on average.
So, the real net monthly average for someone earning S$6,000 in MOM statistics is around S$4,009.
But that is still not what you receive in your account each month, because bonuses are only paid out once or twice a year.
According to MOM’s report on wage practices, the average annual bonus quantum is 1.8 months of basic salary. I’m going to spare you the math, but in our example it works out to a net of S$6,080. At the same time, income taxes are only paid after their assessment, in the following year. Until then, you get the full amount.
That’s why we have to subtract around S$507 from the monthly amount (to account for the bonus) and add back in the S$94 (tax), for the time being.
This leaves us with S$3,596 transferred to your bank account every month.
This is what the median “gross income from work” actually means on a regular basis. Of course, you are still going to receive your bonus, raising that average to around S$4,000 per month eventually. But until then, roughly S$3,600 is all that you get.
Naturally, your situation, bonuses, overtime and also tax deductions are bound to be different and unique to you. But when looking at the official gross figures, you can get a good estimate if you cut roughly 1/3rd off (or 40% if we include the bonus) before you compare them to your own take-home pay.
Now that you know, where does it put you?
- Read other articles we’ve written on Singapore’s job landscape here.
Featured Image Credit: Mehaniq/ depositphotos
