Average (or mean) Monthly Earnings (AME) refers to all remuneration received before deduction of the employee Central Provident Fund (CPF) contributions and personal income tax. I noted that this definition is different from salary (usually monthly) that typically refers only to payment to an employee for completing one month of work.
Salary is therefore a subset of average monthly earnings. Having said that, for a lot of people, salary is their only source of income so some may frequently assume the two to be the same.
In my quest to find out what is the average salary in Singapore, I write about the following in this blog post –
- Average Monthly Earnings vs Salary – expanded
- Median vs Average Salary in Singapore – the difference?
- Income and salary data verification (2019)
- Average monthly earnings from 2009 to 2019
- Some final thoughts
Average Monthly Earnings vs Salary – expanded
More often than not, I find myself searching for information online and spending an equal amount of time trying to validate the authenticity of the source.
This time around, I was looking for the latest data on average salary (or income) in Singapore and while the figure was easily located, I had a bit of difficulty tracing it back to the official source.
Here is my official source – Ministry of Manpower.
The Average Monthly Earnings comprises of –
- Basic wages
- Overtime pay
However, the important thing to note is that the Average Monthly Earnings –
- Exclude employer CPF contributions
- Before deduction of the employee CPF contributions and personal income tax
- Data covered full-time and part-time employees who have CPF contributions
- Data excluded identifiable self-employed persons who have made CPF contributions
Caution : As Average Monthly Earnings pertains to mean earnings, it can be skewed upwards by a small number of very high income earners.
This definition of Average Monthly Earnings is obtained from Ministry of Manpower’s Singapore Yearbook Of Manpower Statistics 2020: Income, Wages And Earnings Table(s).
If you’re wondering what else is inside the yearbook, it contains a wide range of statistics on the labour market. These include key data on the labour force, job vacancy, wages, retrenchment, labour turnover, hours worked, conditions of employment, labour relations, workplace safety and health, higher education and skills training.
Median vs Average Salary in Singapore – the difference?
Remember my earlier post on the Median Gross Monthly Income?
In the blog post, I had stated that based on Ministry of Manpower’s data, the median gross income for 2019 was $4,563. (See accompanying Channel News Asia report.)
My own income growth chart is shown in the table below. Yeah, life isn’t always a bed of roses.
I have written on the definition of median and how median differs from average in a separate blog post on net worth.
[Example] Assume there are five citizens –
- Citizen A – $1,000
- Citizen B – $2,000
- Citizen C – $3,000 (median)
- Citizen D – $4,000
- Citizen E – $20,000
While the average is $6,000, the median is $3,000. One high-income individual that messes up the data. Simple, right? Check it out if you are interested in Singapore’s net worth statistics.
This is an important point to note regarding “median” vs “average”, considering that the multiple variables in calculation that makes it not possible to have an apple-to-apple comparison. In the subsequent sections, you will see that the gross income that is based on “median” figures including employer CPF to be $4,563 whereas the monthly earnings that is based on “average” figures excluding employer CPF to be $5,549.
Income and salary data verification (2019)
The Singapore Yearbook Of Manpower Statistics 2020 contained a total of 9 tables – starting from B1 to B9.
For data verification, I checked out Table B1 which contained median Gross Monthly Income From Work data and true enough, for 2019, the number reflected was $4,563 as per what was reported in mainstream media.
You may also be interested to take a quick look at the Median Gross Monthly Income data from 2009 to 2019 in the table above.
The main difference? Employer CPF contributions (17%) is included Median Gross Monthly Income data. This means that this is equivalent to 117% of what we commonly refer to gross pay. The figure also includes 1/12 of annual allowances (bonuses, allowances, incentives etc).
Average monthly earnings from 2009 to 2019
While gross monthly income data came from Ministry of Manpower, average monthly earnings data came from CPF board.
The latest average monthly earnings for 2019 is therefore $5,549 (or $66,588 per year) excluding employer CPF.
Much like the cautionary note given that data can be skewed upwards by a small number of very high income earners, I am very much aware that while the floor to salary is zero dollars, the ceiling is basically infinite.
This shows in the data – median income data that includes employer CPF contribution is LESS than average monthly earnings that excluded employer CPF contribution.
Some final thoughts
When people search for information such as “average salary in Singapore”, what a lot of people are really asking is how they compare to others in the general population.
This was definitely the case for myself. When I was younger, I looked for such data to try and get a sense of what sort of salary I should be aiming for. In hindsight, purely relying on salary comparison isn’t the most healthy or meaningful thing to do.
In many cases, using median data is actually more reflective of the actual situation. This is why there is a need to emphasize to make meaningful comparisons using the right data.
I think I have been fairly transparent in terms of sharing my monthly income growth (in case you missed the chart above). Yes, I make a decent salary now but it was only a few years ago that I was “officially” making $7 an hour, working 4 days a week.
Those days were AMAZING.
Make what you will of the available data, but do realize that data don’t always paint a full picture. Don’t forget that these data already included the typical 13th month bonus, year-end bonus or performance bonus etc. You need to view the numbers from the perspective of an annual package!
If you’re curious about related data such as the average and median net worth of adult Singaporeans, my blog post contains the data I have gleaned from Credit Suisse.
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Hello! I’m Kevin, Turtle Investor
At the age of 30, I am the personal finance blogger who laid claim to a negative net worth of minus $25,755.
Seven years later in 2019, I hit CPF Full Retirement Sum (FRS) of $176,000 without making a single cent of CPF top-up. More tidbits about myself here if you’re curious. My blueprint for financial independence can help give you a headstart in your own FIRE journey.
I am married to a lovely wife and that means dual income with no kids. In my free time, I chase miles so that we can fly in business class. My hobby is making pocket change off this blog and sharing everything I know with you!
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