Minimum Wage in Singapore: PWM Rates, Sectors & Complete Guide

Singapore's approach to worker compensation differs significantly from the traditional minimum wage systems found in many other countries. Instead of a single, universally applied minimum wage, Singapore employs a multi-faceted approach that includes sector-specific models and various support schemes. This article delves into the intricacies of Singapore's wage system, addressing common questions and providing clarity on its unique structure.

How Much is the Minimum Wage in Singapore?

Singapore does not have a legally mandated national minimum wage. Instead, the country utilizes several models and guidelines like Progressive Wage Model (PWM). The details will be explained in below:

What is the Progressive Wage Model (PWM)?

The PWM systematically raises wages in low-wage sectors, linking wage increases to skills acquisition, productivity improvements, and career advancement.

Key Objectives:

• Facilitates skills upgrading, productivity improvement, career advancement, and wage progression.
• Addresses income inequality and creates a more inclusive society.

Implementation:

Introduced in 2012, the PWM is enforced through business licensing, involving tripartite committees (unions, employers, and the government). It's implemented in phases across various sectors, each with its own wage and training requirements.

Mechanism:

The PWM sets a tiered minimum wage floor based on a worker's skills, experience, and productivity. Employers must pay at least the prevailing wage for a given job role and experience level. Workers are incentivized to upgrade their skills to earn higher wages.

Benefits:

• For Employees: Higher wages, skill development opportunities, and clear career progression pathways.
• For Employers: Increased productivity and better service standards, potentially leading to higher profits.
• Social Equity: Mitigation of income inequality and improved living standards for lower-wage workers.

Compliance and Recognition:

Employers must adhere to sectoral or occupational PWM wages for resident workers and the LQS for other local workers. The Progressive Wage Mark (PW Mark) recognizes companies paying progressive wages.

Expansion and Coverage:

The PWM covers around 221,000 full-time resident lower-wage workers and continues to expand.

Which Sectors are Covered by the PWM?

The PWM currently covers:

• Cleaning (since 2014)
• Security (since 2016)
• Landscape Maintenance (since 2016)
• Lift and Escalator Maintenance (since 2019)
• Retail (since September 2022)
• Food Services (since March 2023)
• Waste Management (since July 2023)

Occupational Progressive Wages (OPWs) also exist for administrators and drivers (since March 2023).

Foreign Worker Coverage under Minimum Wage Regulations

Foreign workers are not covered under a traditional minimum wage. While the PWM doesn't directly apply, other mechanisms ensure fair compensation:

• No Minimum Wage Law: Singapore lacks a universal minimum wage law.
• Progressive Wage Model (PWM): The PWM indirectly influences wages in certain sectors but isn't a universal minimum wage.
• Local Qualifying Salary (LQS): Employers must pay local workers at least the LQS, impacting foreign worker quotas but not directly applying to foreign workers.
• Employment Pass (EP) and Other Work Passes: Foreign workers on EPs must meet specific salary thresholds to qualify for or renew their work passes.

Progressive Wage Model (PWM)

The PWM sets minimum wages for specific low-paying sectors. These are not hourly or monthly minimum wages applicable across all industries. Examples of sector-specific minimum basic salaries include:

• Administration: S$1,800–2,980 per month (1 Jul 2024 - 30 Jun 2025).
  • The details will be mentioned on the MOM official website of occupational PWM for administrations.
• Cleaning: S$1,740–2,620 per month (1 Jul 2024 - 30 Jun 2025 and differed into 3 different sector categories of cleaners).
  • Learn more about the correct wage requirements on the MOM official website of PWM for the cleaning sector.
• Driving: S$1,970–2,085 per month (1 Jul 2024 - 30 Jun 2025).
  • The detailed breakdown of wage requirements is mentioned on the MOM official website of occupational PWM for drivers.
• Food services: S$1,915–2,565 per month (1 Mar 2024 - 28 Feb 2025 and differed into 2 different categories of establishment).
  • Find out the detail categories for each food services establishment according to the levels on the MOM official website of PWM for food services sector.
• Other sectors have similar ranges.

Local Qualifying Salary (LQS) calculation

Since 1 September 2022, businesses employing foreign workers must comply with the following requirements:

• Progressive Wage Model (PWM): PWM to local employees covered under the relevant sectoral or occupational PWMs, including those in the cleaning, security, landscape maintenance, and retail sectors, as well as in-house workers covered by the PWM.
• Local Qualifying Salary (LQS): Ensure all other local employees earn at least the LQS.

The firm’s foreign worker quota entitlement is determined by the number of local employees earning the LQS, defined as:

• 1 Local Worker: Employees earning a minimum of $1,400 per month.
• 0.5 Local Worker: Employees earning between $700 and below $1,400 per month.

As announced in the Singapore Budget 2024, the LQS will increase from $1,400 to $1,600 starting 1 July 2024. This change requires businesses employing foreign workers to adapt to updated quota requirements and plan for potential increases in manpower costs to maintain compliance. Failure to meet these requirements may result in an inability to renew existing work passes or apply for new ones, impacting workforce composition and operational capabilities.

Local Qualifying Salary (LQS) and Part-Time Workers

For monthly rated part-timers, the hourly gross rate is calculated as follows to check if it meets the ≥ $9/hr gross requirement:(total monthly gross wages) ÷ (total hours worked for the month)

Example:

Miguel is a part-time local worker at Company A. He dedicates 25 hours per week to the job, earning a gross monthly wage of S$1,000.

Hourly gross rate = (total monthly gross wages) ÷ (total hours worked for the month)

Hourly gross rate = S$ 1,000 / ( 25 * 4 ) = S$ 1,000 / 100 = $10

Since Miguel’s hourly wage of $10/hr is more than the LQS of $9/hr and his monthly wage is more than $700 but less than $1,400, he will be counted as a 0.5 local worker. 

Note: As announced in Singapore Budget 2024, the minimum part-time hourly rate to meet LQS  will increase from $9 per hour to $10.50 per hour, effective from 1 July 2024 onwards.

Foreign Workers and Employment Passes

Minimum salaries for foreign workers are determined by their employment pass type:

• S Pass holders: S Pass is a gateway to many job opportunities in Singapore, especially for mid-skilled professionals. The S Pass qualifying salary is scheduled to increase from September 1, 2025 for new applications and from September 1, 2026 for renewals:
  • All sectors (except financial services): The minimum salary will increase from $3,150 to at least $3,300.
  • Financial services: The minimum salary will increase from $3,650 to at least $3,800. 
• Employment Pass (EP) holders: EP holders are for foreign professionals, managers and executives with a job offer in Singapore who meet the eligibility criteria. Fixed monthly salary comparable to the top one-third of local PMFT (Professionals, Managers, Executives, and Technicians) salaries, starting from $5,000 and increases progressively with age, up to $10,500 for those in the mid-40s. Candidates in the financial services sector need higher salaries to qualify.

In essence, Singapore's system lacks a universal minimum wage; instead, wages are regulated through sector-specific models and guidelines for different worker types.

Review and Adjustment of PWM Rates

PWM rates are adjusted regularly to remain relevant:

• Annual Adjustments: Wage rates are adjusted annually to reflect stipulated wage increases.
• Sectoral Reviews: Tripartite committees review wage standards and career progression pathways, recommending minimum wage levels and skills training programs.
• Periodic Expansions and Updates: The PWM periodically expands to new sectors and updates to reflect changing economic conditions.

Penalties for Non-Compliance with PWM Requirements

Employers failing to comply with PWM requirements face severe consequences:

• Financial Penalties: Significant fines (up to S$10,000 for subsequent offenses).
• Imprisonment: Potential imprisonment for serious violations.
• Late Payment Penalties: Additional fines and potential imprisonment for late wage payments.
• Reputational and Operational Impact: Damage to reputation and potential business disruptions.

PWM vs. Traditional Minimum Wage

Comparison with Other Countries' Minimum Wage Systems

Singapore's system differs from many countries with universal minimum wage laws (e.g., US, Australia, UK). Singapore's approach is more market-driven, with flexibility for wage adjustments based on industry conditions, skills, and productivity.

Eligibility for PWM Protection

The PWM protects Singapore citizens and permanent residents working full-time or part-time under a contract of service in designated sectors. Employers must meet wage and training requirements and pay at least the LQS for other local workers.

Conclussion

In Singapore, minimum wage requirements vary by sector and skill level in Progressive Wage Model (PWM). Examples include tiered wages in the cleaning sector (Basic, Skilled, Specialist Cleaner) and progressive wage increments in the retail and food services sectors, each with mandatory training requirements.

This comprehensive guide provides a detailed overview of Singapore's unique minimum wage system. Its nuanced approach prioritizes skills development and career progression alongside fair compensation, setting it apart from traditional minimum wage models.