We’re officially in 2026, and for many Singapore businesses, one big question is already front of mind:
Are our payroll and salary budgets realistic for the year ahead?
To answer that, we need to look back at 2025. Last year quietly reshaped wage expectations across Singapore and the decisions made then now form the foundation of every 2026 payroll plan.
If you’re reviewing numbers this Monday morning, understanding the Singapore wage trends of 2025 can help you plan more confidently for salary planning and payroll budgeting in 2026.
2025 in Review: What Changed in Singapore’s Wage Landscape
Before planning what’s next, it helps to understand what actually changed last year.
2025 quietly reshaped Singapore’s wage landscape, setting new expectations that now carry into 2026.
Steady Wage Growth Became the New Normal
Throughout 2025, wages continued to rise across most industries. While the pace differed by sector, the overall direction was clear, salary expectations increased, and competition for talent remained strong.
For many employers, this meant:
- Higher increments than originally planned
- Increased starting salaries for new hires
- Greater pressure to retain experienced employees
- These changes didn’t always happen all at once, but by year-end, payroll costs had clearly moved up.
Progressive Wage Model Continued to Lift Baselines
The Progressive Wage Model (PWM) remained a key driver of wage adjustments in 2025. Structured increases in sectors such as cleaning, security, retail, and food services raised minimum pay levels and influenced broader market benchmarks.
Even companies not directly under PWM felt the impact, as wage expectations rose across the labour market.
Skills Drove Pay Decisions More Than Titles
Another noticeable shift in 2025 was how companies rewarded skills over job titles. Roles linked to digitalisation, automation, and data-driven operations attracted higher pay as demand outpaced supply.
This trend pushed many businesses to revisit salary bands and rethink how they plan future increments.
Cost-of-Living Pressures Shaped Salary Conversations
Rising living costs continued to influence wage discussions in 2025. Many employers introduced targeted adjustments or allowances to stay competitive, adding another layer to overall payroll spending.
What 2025 Wage Trends Mean for Your 2026 Payroll Budget
Now that we’re in 2026, those 2025 decisions are your new starting point.
Higher Payroll Baselines Are Locked In
Any increments or adjustments made last year now carry forward. This affects:
- Monthly salary costs
- Employer CPF contributions
- Overtime and shift-related pay
- Bonuses and AWS calculations
When planning your payroll budget in Singapore, using outdated assumptions can quickly lead to shortfalls.
Budgeting Needs to Be Clearer and More Accurate
One common issue in 2025 was underestimating the true cost of wage increases. Manual calculations and spreadsheets often missed indirect impacts, forcing companies to revise budgets mid-year.
In 2026, payroll budgeting needs better visibility and cleaner data from the start.
Salary Planning in 2026 Will Be More Strategic
This year, salary planning is less about across-the-board increments and more about smart allocation. Businesses will need to balance:
- Retention costs versus replacement costs
- Targeted increases for critical roles
- Sustainable wage growth aligned with performance
Companies that plan early have more flexibility and fewer surprises.
Why Payroll Planning Still Feels Hard for Many Businesses
Despite best intentions, many Singapore companies struggled last year due to:
- Manual payroll updates after each wage change
- Limited insight into total labour costs
- Time-consuming CPF and allowance recalculations
- Disconnected HR and finance data
These challenges don’t just slow HR teams, they affect financial confidence at the leadership level.
A Smarter Way to Approach Payroll in 2026
As payroll becomes more complex, the right system can make a real difference.
Modern HR and payroll platforms like HRMLabs help Singapore businesses:
- Stay compliant with local regulations automatically
- Track wage changes and payroll costs in real time
- Support growth without increasing admin workload
- Improve budgeting clarity without relying on spreadsheets
With better tools, HR and finance teams spend less time fixing numbers—and more time planning the year ahead.
Monday Takeaway: Start 2026 with Clarity
Looking back at Singapore wage trends in 2025 gives us a clear message: payroll costs are higher, expectations have shifted, and planning matters more than ever.
For businesses reviewing their 2026 payroll budget, the best move is to start early, work with accurate data, and simplify payroll processes where possible.
A clear plan today makes the rest of 2026 far easier to manage.
