Here's How Much Annual Bonus is Paid According to Industry

When it comes to looking for a job, there are various factors to consider.

For some, what’s most important is the job progression and salary increment that a job offers.

For others, it might be the culture of the company and the benefits it provides.

If you’re a reader of Seedly, there’s a high chance that you’re one who’s looking to achieve your financial goals and attain financial freedom.

While we can strive to save more and invest better, one of the fastest ways to do so is to earn more.

Besides your basic salary, one thing to look out for would be the bonus package that the company offers, which could provide a significant bump to your annual salary package.

I’ve personally heard of bonus packages that could range up to 10 months on a good year…

That’s like receiving almost double of a typical monthly salary. 🤯

So how much do companies typically pay employees in terms of bonuses in Singapore?

TL;DR: How Much Annual Bonus Is Paid in Singapore: Is Your Company Paying You at ‘Market Rate’?

Source: Survey on Annual Wage Changes, Manpower Research & Statistics Department, MOM

What Are the Typical Annual Bonus Components in Singapore?

In Singapore, there are a few types of components that would make up the variable portion of your salary.

They are typically referred to as the variable wage components.

Do note that these payments are not compulsory unless stated in your employment contract.

Some common variable wage components would include the Annual Wage Supplement (AWS), bonus, and other variable payments.

Annual Wage Supplement (AWS)

Also known as the 13th month payment, the Annual Wage Supplement (AWS) is a single annual payment that is given on top of an employee’s salary.

This is also known as the Non-Pensionable Annual Allowance (NPAA) for those in the public service.

It’s interesting to note that the idea of having the 13th month payment first came about as an allowance for public servants to help bridge the widening gap with private sector wages.

Similar to other benefits, the 13th month payment is not required by law unless stated in the employment contract.

Also, a company cannot pay AWS of more than 1 month’s salary if no AWS has been paid before 26 August 1988.

Bonuses

Bonuses are one-time payments to reward employees for their contributions to the company.

They can be given for various reasons, depending on the type of job and industry.

Bonuses can be divided into two categories – discretionary and non-discretionary bonuses.

Some common bonuses that are offered by companies include:

Performance Bonus: Typically tied to an employee’s performance, given based on how well one performs at his/her job

Sign-on Bonus: Typically offered as either a lump sum or over a period of time, and given when an employee agrees to sign an employment contract

Retention Bonus: Typically given when a company goes through big changes, and offered to employees who are looking to leave the company

Annual Bonus: Some companies provide an annual bonus besides AWS, and might be pegged to the company’s performance for the year

Stock Options: A type of bonus that is not cash, giving ownership interest in the company. Mostly distributed by startups so that the employee can sell it when the company decides to go public

How Much Annual Bonus is Paid in Singapore By Industry

Based on the Ministry of Manpower’s (MOM) Survey on Annual Wage Changes, this is the amount of variable component paid according to industry for the past 10 years, from 2010 to 2020.

Source: Survey on Annual Wage Changes, Manpower Research & Statistics Department, MOM

According to the survey, the Financial & Insurance Services industry has the highest variable component paid at 3.21 months in 2020.

This is followed by the Community, Social & Personal Services industry, which gave out an average of 2.14 months of variable component in 2020.

The lowest was the Accommodation & Food Services industry, which gave 0.68 months last year.

The amount of bonus payouts is at the lower end in 2020 as compared to the ten-year average, presumably due to the economic downturn caused by the pandemic.

What To Look For In A Job: Is Salary The Most Important Thing?

If you are a regular employee, our salary is no doubt one of the most important things when it comes to our job.

Especially if you’re someone who is big on the Financial Independence Retire Early (FIRE) movement, having a job with a high pay is one of the most efficient methods that can get you on track.

But does that mean that if you’re presented with two job opportunities, the one offering a higher pay package would always be the better option?

Definitely not.

At least for me.

There are various factors when it comes to job satisfaction and priorities, and these factors also shift as we advance our careers as well.

(We made a comic on this as well!)

A job that might offer a lower starting pay might allow you to gain skills that would future proof your employability, thereby accelerating your earning power at a much higher rate in the future.

For instance, I did a career switch previously and took a pay cut to be more aligned with my current career priorities, moving to a job that would potentially give me an exponential advantage instead.

Having more money right at the beginning is always attractive, but it’s important to evaluate your own career priorities and trajectory.

Use Salary Guides To Ensure You’re Not Underpaid

Salary has always been a sensitive topic to discuss with our peers, yet it’s a topic that most of us would always be curious about.

And if you feel like you’re underpaid, there are various reasons that could be contributing to it.

It could be due to the level of demand for the skills that you currently offer, or simply because you’re being shortchanged by your company.

Which is why salary guides and platforms like Glassdoor are really helpful for employees to gauge the salary range of their job positions in their industries.

And if you are sure of your skills and the level of contribution you’re making to the company, make sure you ask for what you deserve.

And if any new job opportunity you’re looking for does come with a big fat bonus package… Why not right?

Got any career-related questions? Time to get them answered here!