SINGAPORE, July 21, 2025 — Average salary increase budgets for organisations in Asia Pacific (APAC) in 2026 are expected to be at 5.2%, a slight increase from 2025 at 5.1%. This is according to the latest Salary Budget Planning Report by WTW (NASDAQ: WTW), a leading global advisory, broking and solutions company.
| Key markets | 2024 actual salary increase | 2025 actual salary increase | 2026 projected salary increase |
|---|---|---|---|
| APAC average | 5.2% | 5.1% | 5.2% |
| Australia | 3.8% | 3.5% | 3.5% |
| China | 5.0% | 4.3% | 4.9% |
| Hong Kong | 4.0% | 3.7% | 4.0% |
| India | 9.5% | 9.0% | 9.0% |
| Indonesia | 6.3% | 6.0% | 6.1% |
| Japan | 3.0% | 3.0% | 3.0% |
| Malaysia | 5.0% | 4.7% | 5.0% |
| Philippines | 5.5% | 5.3% | 5.5% |
| Singapore | 4.0% | 4.0% | 4.0% |
| South Korea | 4.5% | 4.3% | 4.3% |
| Taiwan | 4.0% | 3.9% | 4.0% |
| Thailand | 5.0% | 4.5% | 4.9% |
| Vietnam | 7.5% | 7.0% | 7.0% |
Source: WTW 2024 and 2025 Salary Budget Planning Survey Reports – Asia Pacific (July editions)
In Singapore, employers are projecting salary increase budget to remain flat at 4% in 2026, a trend which is expected to continue since 2024, and with most organisations (97%) continuing their regular salary reviews this year. This reflects a cautious approach by companies amidst current global economic uncertainties.
The stability in salary increase budgets is observed alongside varying organisational strategies. While two out of five organisations have seen a lower salary budget since the last pay cycle, primarily due to anticipated recession or weaker financial results (30%) and concerns related to cost management (25%), 15% of organisations are projecting higher salary increase budgets. The reasons cited for these increases include tight labor markets (22%), inflationary pressures (16%) and recalibrated pay due to lower increases in prior years (16%).
“Employers are becoming more strategic in how they distribute compensation, prioritise investments and define the results they aim to achieve.”
Gary Goh | Rewards Data Intelligence Practice Leader, Singapore, WTW
“Although overall budgets remain stable, the real transformation is happening behind the scenes. Employers are becoming more strategic in how they distribute compensation, prioritise investments and define the results they aim to achieve. Rather than simply reacting to economic trends, companies are proactively reshaping their approach to better align with broader business objectives, even in uncertain times,” said Gary Goh, Rewards Data Intelligence Practice Leader, Singapore at WTW.
Additionally, 82% of organisations in Singapore plan to maintain their headcount within the next 12 months. This represents an increase of 10% compared to 2024.
Of the remaining organisations, twice (12%) as many intend to increase their headcount within the same period in 2025 compared to those which intend to reduce it (6%). More organisations also reported fewer problems attracting and retaining employees in 2025, with 66% indicating no or slight problems, up from 58% in 2023.
Employers are also adjusting their compensation programmes to supplement their regular salary reviews on account of rising operating costs, while mitigating competitive labour pressures. These actions included conducting a compensation review of specific employee groups (54%), implementing targeted base salary increases for specific employee groups (39%), and enhancing the use of retention bonuses or spot awards (36%).
“These actions have significant potential for long-lasting benefits to help address companies’ mid-to longer-term talent needs and establish a resilient workforce.”
Gary Goh | Rewards Data Intelligence Practice Leader, Singapore, WTW
More organisations have also undertaken or are planning complementary actions to address talent needs and support their employees. These include improving employee experience (78%), increasing training opportunities (68%), broader emphasis on diversity, equity and inclusion (60%) and enhancing health and wellness benefits (53%).
“In a complex labour market marked by global economic challenges, employers are hedging against rising labour costs by proactively deepening investments in areas such as career development, health and wellbeing. These actions have significant potential for long-lasting benefits to help address companies’ mid- to longer-term talent needs and establish a resilient workforce as they continue to traverse these unpredictable times,” added Gary.
Shai Ganu, Managing Director and Global Leader, Executive Compensation and Board Advisory at WTW, said: “Employers in the region are concerned about losing critical talent, with change management, talent attraction and employee experience being significant issues. A recent survey conducted by WTW across APAC reveals companies are adapting to economic shifts through various strategies. Cost reduction emerges as a key approach, with nearly half considering operational cuts, including headcount reductions.”
The survey also indicated a pivotal shift towards intra-Asia resilience, with 37% of companies looking to explore new markets within Asia and 33% considering to diversify supply chains from the West to within Asia. Furthermore, half of the companies said they are not planning to make significant changes to their compensation plans. Of those who are considering changes, approximately a quarter are considering changes to incentive metrics (26%) or modifying performance goals to account for volatility (25%).
“These adjustments aim to align compensation with the new economic realities and maintain employee motivation and performance. Additionally, the ‘From Asia – For Asia’ strategy is likely to impact trade and talent flows, impacting compensation outcomes within the region,” added Shai.
Overall, the trends in Singapore and broader APAC reflect a cautious yet adaptive approach to workforce management amidst economic shifts. Companies are balancing between maintaining stability and addressing emerging challenges in the labour market.
The Salary Budget Planning Report is compiled by WTW’s Rewards Data Intelligence practice. The survey was conducted from April to June of 2025. Approximately 32,000 responses were received from companies across 168 countries worldwide, including in Asia Pacific. In Singapore, 646 organisations participated.
The 2025 Adapting to Global Economic Shifts: Asia Pacific Survey, conducted by WTW, provides a high-level analysis of the strategies and concerns of 145 organisations across the Asia Pacific region as they navigate the evolving economic landscape. The survey highlights key areas of focus including the potential impact of tariffs on profitability, corporate strategies to adapt to these impacts, workforce-related concerns and adjustments to compensation plans.
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