50% of S’pore workers set to earn S$6,000+ as salaries rise. But what’s the take-home pay?

Singapore's economy is booming with GDP growth hovering around 6%, leading to a projected 4.1% salary increase according to Aon, a leading insurance broker. This trend is similar to estimates from Mercer, WTW, Korn Ferry and Robert Walters, all predicting around a 4% rise in gross median income from work. If these projections hold true, half of Singapore's workers could earn S$6,000 per month or more by the end of 2025.

However, the figures provided by the Ministry of Manpower (MOM) include employer CPF contributions, which do not represent the actual take-home pay. CPF contributions, including the employee's and employer's share, amount to approximately 37% of the gross salary.

After accounting for employer CPF contributions, employee CPF and income tax, the real net monthly average for someone earning S$6,000 in MOM statistics is around S$4,009. But this amount is not what workers receive in their bank accounts each month, as bonuses are paid out only once or twice a year.

According to MOM's report, the average annual bonus quantum is equal to 1.8 months of basic salary. In our example, this works out to an additional S$6,080. When accounting for the bonus and subtracting the tax, the median take-home pay for the median "gross income from work" is estimated at S$3,596 per month.

It's important to note that individual take-home pay will vary based on bonuses, overtime, and tax deductions. However, when comparing with official gross figures, workers can estimate their take-home pay by cutting roughly 33% (or 40% including the bonus) from the gross median income.