Singapore salaries set to rise 4% in 2026, but real wage growth remains subdued: Mercer

Employees in Singapore are expected to see an average salary increase of 4% in 2026, closely aligned with the 4.1% growth recorded in 2025, according to Mercer’s latest Total Remuneration Survey. The study, which analyses pay trends across nearly 6,000 roles in more than 1,100 organisations in Singapore, found that 97.6% of organisations plan to implement salary increases next year—slightly lower than the 99.2% recorded previously.

Mercer noted that individual performance, position within salary range, and job promotions will remain the primary factors influencing salary adjustments. However, while the outlook for salary increments remains broadly positive, real wage growth continues to face pressure amid a more challenging economic climate.

In 2025, sectors closely aligned with Singapore’s strengths as a strategic regional hub—including logistics and shipping, aerospace, high-tech manufacturing, and consumer goods—outperformed expectations, delivering base salary increases of 4.9% to 5.5%. Despite this, overall real wage growth settled at 2.9%, highlighting the impact of sector-specific challenges and broader economic uncertainty.

The high-tech sector saw more muted growth, recording a 3% increase against a budgeted 3.8%, largely due to continued automation, offshoring, and the commoditisation of certain IT functions. Yet demand remains strong for highly specialised technology roles—particularly in cloud computing, cybersecurity implementation, user acceptance testing, and IT augmentation—driven by sustained digital investments and critical skill shortages.

Eugene Chong, Head of Career Products, Mercer Singapore, said, “Merit increases must also reflect the broader cost-of-living dynamics, as rising living expenses directly impact employee financial wellbeing. To ensure competitive and fair compensation, organisations need to consider all relevant factors—including inflation and market conditions when determining salary adjustments.”

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Looking ahead to 2026, most industries expect more moderate salary growth of between 3.2% and 4.5%. Wage premiums are anticipated to remain concentrated in sectors that strengthen Singapore’s position as a strategic regional hub, particularly roles that support resilience, transformation, and sustainable business growth.

As organisations navigate continued uncertainty, Mercer highlighted increasing demand for roles in risk management, demand forecasting, analytics, IT augmentation, and data-driven functions. Meanwhile, mergers and acquisitions expertise remains critical as organisations seek inorganic growth opportunities amid slower organic expansion.

“As organisations approach talent and salary review cycles, it is essential to consider segmented budgets for critical talent across these jobs and skills to bolster talent attraction and retention,” Chong concluded.