Annual Wage Supplement in Singapore 2026

The Annual Wage Supplement (AWS) is Singapore's de facto 13th-month salary. It equals one month of gross basic salary by convention, is not required by law but is paid by around two thirds of private-sector employers, and is fully subject to CPF contributions. An employee on $5,000/month takes home roughly $4,000 from the AWS after CPF, before income tax.

What the AWS is and where it comes from

The Annual Wage Supplement is a year-end payment equal to one month of an employee's gross basic salary (not allowances or variable pay). It originated as a tripartite recommendation by the National Wages Council and has become a standard part of total compensation in Singapore. Most collective agreements and many individual contracts specify it. Unlike the 13th-month payments in Austria or Italy, which flow from statute, the AWS has no legal basis in the Employment Act: it is a contractual entitlement that exists only if your contract or agreement provides for it.

CPF treatment of the AWS

The AWS falls into the Additional Wages (AW) category for CPF purposes. CPF is payable on AW up to the Annual Additional Wage (AAW) ceiling:

AAW ceiling = S$102,000 minus CPF-subject ordinary wages earned in the year.

For an employee paid $4,000 a month throughout the year, ordinary wages are 12 × $4,000 = $48,000. The AAW ceiling is therefore S$102,000 − $48,000 = $54,000. The AWS of $4,000 falls well within the ceiling, so the full amount is CPF-subject. The employee contribution is 20% of $4,000 = $800, leaving $3,200 in take-home before income tax.

Worked examples

Monthly gross AWS gross CPF (20% employee) AWS net of CPF
$4,000/month $4,000 $800 $3,200
$7,000/month $7,000 $1,400 $5,600
$8,000/month $8,000 $1,200 $6,800

CPF rates shown are for employees aged 55 and below. Income tax also applies to the AWS; it forms part of total chargeable income assessed by IRAS for the year of assessment. See the income tax rates guide for the progressive bands.

Employees who do not receive CPF

Employment Pass, S Pass and other work pass holders are not subject to CPF. For these employees the AWS is simply a gross cash payment; the full amount adds to chargeable income for the year and is taxed at the higher of the flat non-resident rate or progressive resident rates, depending on residency status.

Pro-rated AWS on joining or leaving mid-year

When an employee joins or leaves during the year, the AWS is typically pro-rated by months of service. The exact formula depends on the employment contract or collective agreement. If the contract is silent, the MOM recommends pro-rating proportionally.

Frequently asked questions

Is the Annual Wage Supplement compulsory in Singapore?

No. The AWS is a market norm, not a legal requirement. The Employment Act does not mandate it. However, if your employment contract or a collective agreement specifies an AWS, the employer is contractually bound to pay it. About two thirds of private-sector employees in Singapore receive an AWS, according to MOM surveys.

Is the Annual Wage Supplement subject to CPF contributions?

Yes. The AWS counts as additional wages (AW). CPF is payable on it up to the AW ceiling, which is S$102,000 minus the CPF-subject ordinary wages already paid in the same year. For most full-year employees on salaries below S$8,000 a month, the full AWS amount falls within the ceiling and attracts CPF contributions.

When is the Annual Wage Supplement paid?

There is no fixed statutory date. Most employers pay the AWS in November or December, ahead of Chinese New Year or the calendar year-end. Some collective agreements specify the month. The payment date, if not in your contract, is at the employer's discretion.

CPF rates from CPF Board, effective 1 January 2026 (OW ceiling S$8,000/month, AW ceiling S$102,000/year). Last updated 2026-11-04.