Ministerial salaries to increase by up to 9% to S$1.2m, lower than review committee's recommendation

SINGAPORE: Singapore’s political office holders will receive a salary increase of up to 9 per cent, taking the sum to about S$1.2 million annually for a minister in the lowest MR4 grade, Prime Minister Lawrence Wong announced on Tuesday (Sep 8).

Speaking in parliament, Mr Wong, who is also finance minister, said the changes will kick in from Oct 15 this year, after the government accepted the recommendations by an independent review committee that was appointed in December last year.

It is the first time since 2011 that ministerial salaries have been changed.

Mr Wong was delivering the government’s response to the committee’s recommendations for the benchmark salary for a minister at the MR4 grade – the lowest of four tiers – to be raised from the current reference salary of S$1.1 million to S$1.8 million.

The committee also recommended changes to other political salaries and to the allowances of members of parliament and other parliamentarians.

Adjustments to the salaries of the president, parliamentary speaker and deputy speakers will also take effect from the same date, said Mr Wong.

“We will not move immediately to the new salary benchmarks. Instead, we will make a one-off adjustment now of up to 9 per cent for political office holders,” said Mr Wong.

“I say ‘up to’ because the same increase will not automatically apply to everyone. The adjustment for each officeholder will depend on individual circumstances, including performance and when his or her salary was last adjusted.”

Mr Wong explained that for an MR4 minister earning the current reference salary of S$1.1 million, the full 9 per cent adjustment would bring the amount to about S$1.2 million.

There would be no further special adjustments to close the gap to S$1.8 million thereafter, said Mr Wong. 

Instead, any subsequent changes will be based on individual performance and responsibilities, he noted.

The estimated expenditure on manpower for political appointments in the 2026 financial year is S$53.365 million, according to a document published on the Budget 2026 website.

Coordinating Minister for Public Services Chan Chun Sing said the committee's recommendations will cost the government around S$5 million more per year if the maximum of 9 per cent is applied to all political appointment holders.

The adjustments for Members of Parliament will cost S$6.6 million more annually, he said.

MINISTERS’ WAGE PACKAGE

There are currently four ministerial grades – MR4, MR3, MR2 and MR1 – with a range of salary points within each grade which determine a minister’s fixed pay, said Mr Wong.

Going forward, the MR2 and MR3 grades will be merged into a single grade.

“As PM, I decide the grade of each minister; where each minister is positioned within the salary range for that grade; and the individual performance bonus each year,” he said.

A total of 10 out of the 16 ministers are currently at MR4.

The other six are at higher grades, reflecting their seniority and heavier responsibilities, including those serving as coordinating ministers.

The three coordinating ministers are Defence Minister, Mr Chan, who oversees public services, Health Minister Ong Ye Kung who oversees social policies, and Home Affairs Minister K Shanmugam who helms national security. The two senior ministers in Cabinet are Mr Shanmugam and former prime minister Lee Hsien Loong.

Over time, ministers can move to different salary points within their grade based on their performance, said Mr Wong.

“They may begin at the lower end of the salary range. Those who perform well may move to a higher point within the range. Some ministers may also be promoted to a higher grade as they take on greater responsibilities,” he said.

There are also variable components which make up more than one-third of a minister’s annual remuneration, he said.

For instance, a national bonus applies to all office holders, based on the outcomes specified in the framework.

An individual performance bonus also depends on the prime minister’s assessment of each office holder’s performance. Last year, it ranged from three to six months, said Mr Wong.

“So when we refer to the current MR4 reference salary of S$1.1 million, this is an all-in reference figure. It includes fixed pay together with assumed levels of performance and bonus payouts,” Mr Wong said.

“The actual remuneration received by an individual minister in any year can therefore be higher or lower than the reference salary, depending on his or her salary point and the variable payouts.”

Mr Chan also said the government accepted the committee’s recommendations to retain the existing approach for statutory appointment holders, with clear and established pegs to the political salary framework.

The president’s monthly salary will continue to be pegged to the prime minister’s monthly salary. This means that from Oct 15, the president earns the same S$180,000 monthly salary as the prime minister, which works out to an annual salary of S$2.52 million for the president assuming he gets an annual variable component of one month.

The speaker of parliament’s salary will be pegged at 50 per cent of the MR4 minister reference salary, and the deputy speaker’s annual package will continue to be pegged at 15 per cent of the speaker’s salary.

The government will also study a recommendation from the committee to study the salary pegs for the speaker and deputy speakers, taking into account how their roles and responsibilities may have evolved over time, said Mr Chan.

In particular, the committee recommended that the government consider whether their package might be better aligned with the formulation for the president’s monthly salary.

PM DONATES SALARY INCREASE TO CHARITY

In his speech, Mr Wong said that the prime minister’s salary is set at twice the MR4 benchmark. This means that Mr Wong earns a total annual salary norm of S$3.6 million including bonuses, up from S$2.2 million presently.

“I have decided that, for the next five years – assuming I remain PM – I will donate the full increase in my salary arising from this adjustment,” he said.

He will continue to receive his salary as provided for under the framework, and will then “donate the increase to suitable good causes”, said Mr Wong.

“This is my own decision. I do not expect other office holders to do the same. As a general rule, I do not believe in making a public show of charitable giving."

Mr Wong said that, as prime minister, he carries the “ultimate responsibility” for the salary framework, and so “it is right that Singaporeans should know what I have decided, and that I am taking these changes forward because I believe they are in Singapore’s interests”.

He will review the position again at the end of five years, taking into account the circumstances at that time.

“I fully expect to continue supporting good causes, as I have always done. But I do not want to make an open-ended public commitment, or to create an expectation that future prime ministers may feel obliged to follow,” he added.

CHANGES TO NATIONAL BONUS

Mr Chan also said the targets for the national bonus – which is part of the variable pay component for political appointment holders – will be updated to drive better outcomes.

The national bonus ranges from zero to six months, and is tied to four indicators: whether people have jobs, whether incomes are growing at the median level, whether incomes are growing at the lower rungs, and whether the economy is growing.

The government accepted the committee’s recommendations that all four indicators be revised.

Mr Chan noted that the Singapore economy’s average growth rate has been about 2.6 per cent over the past decade.

As Singapore's economy is maturing, years with higher growth are the exception and not the norm, he said.

The Ministry for Trade and Industry expects real GDP to grow by an average of 2 to 3 per cent per annum over the next decade, he added.

“Our responsibility is to set targets that are ambitious, credible and sustainable. This is why the committee had calibrated the GDP growth indicator to Singapore's long-term growth potential, not the exceptional performance of specific years,” he said.

The government also agreed to explore the possibility of including a quality of life measure in the national bonus framework when available, said Mr Chan.

STREAMLINING MINISTERIAL GRADES

The merger of the MR2 and MR3 grades will bringing the number of ministerial tiers down from four to three, said Mr Wong.

The salary peg for the merged grade will be 1.3 times the salary of MR4, which is the midpoint of the current pegs of 1.2 and 1.4 times.

The salary range for each grade will also be widened to plus or minus 25 per cent, said Mr Wong.

“We agree with these changes. But the basic approach to assessing and differentiating individual salaries will remain the same,” he said.

“After the one-off special adjustment, I will continue to assess ministers and adjust their salaries in the usual way, based on performance.”

On that basis, he expects most ministers who remain at MR4 to be at the lower end of the new salary range – about S$1.35 million – by the end of this term of government.

Mr Wong said that those who excel and take on larger responsibilities may move higher within the range, or be promoted to a higher grade.

“So the revised MR4 benchmark of S$1.8 million is not a target salary that every minister must eventually reach. Ministers can be paid above or below the benchmark, within the prescribed range,” he noted.

Mr Chan said the wider salary range gives greater room to cater for people joining political service from different backgrounds and at different stages of their careers. Someone who is already highly established can be placed higher within the range.

“The individual is still likely to have to take a pay cut to enter political service, but the wider range will help make the pay cut less steep,” he said.

OTHER OFFICE HOLDERS

For ministers of state, parliamentary secretaries and mayors, Mr Wong said he would “typically consult their supervising ministers on their performance”, but noted that the final decision on their salary points, grades and bonuses rests with him.

New office holders appointed in the next term will likewise come in at different points within those ranges, taking into account their experience and previous remuneration, he said.

This would over time bring a wider spread in salaries compared to today, which is the purpose of the revised structure, said Mr Wong.

“It gives the PM more room to differentiate pay according to performance, and importantly, to bring in people with substantial experience from outside government, especially those already earning significantly more in the private sector,” he said.

Mr Chan said the grades for mayors, senior parliamentary secretaries and parliamentary secretaries will also be merged, and the peg will be 0.45 times of MR4, toward the lower end of the current range of 0.38 to 0.6 times.

For this merged grade, a wider salary range of 70 per cent to 130 per cent of the reference salary will apply so that there is flexibility to cater for greater diversity among appointment holders in this grade, said Mr Chan.

While they are still expected to make a “meaningful sacrifice” to enter political service, “we should not make that gap larger than it needs to be”, said Mr Wong.

“Overall, I believe this will give me and future prime ministers a better chance of persuading capable Singaporeans to step forward, and of building the strongest possible team for Singapore,” he said.

The government’s response to the review committee’s recommendations will be debated in parliament on Thursday.