Quick answer
A bonus in Singapore is an additional payment on top of basic salary. AWS, performance bonus, company bonus and retention bonus may be taxable employment income. CPF may also apply to bonus for eligible Singapore Citizens and PRs, subject to CPF wage ceiling rules.
What is a bonus in Singapore?
A bonus is an additional payment given to employees on top of their basic salary. It may be paid as a year-end bonus, performance bonus, company bonus, variable bonus, retention bonus or Annual Wage Supplement, commonly known as AWS or 13th month payment.
AWS / 13th month
A single annual payment on top of normal salary, usually equal to one month of basic salary if granted.
Performance bonus
A bonus linked to performance, appraisal rating, KPI, company results or management decision.
CPF and tax
Bonus may attract CPF for eligible employees and is usually counted as employment income for tax.
Is bonus compulsory in Singapore?
In Singapore, bonus payments are generally not automatic unless they are stated in your employment contract, collective agreement, company policy or official bonus letter. If the bonus is discretionary, the employer usually has more flexibility to decide whether to pay it and how much to pay.
Common types of bonus in Singapore
Different bonuses can have different rules. Some are contractual, while others are discretionary or tied to company performance, appraisal outcomes or continued employment.
| Bonus Type | Meaning | Usually Compulsory? |
|---|---|---|
| AWS / 13th Month Payment | A single annual payment on top of basic annual salary. | Only if stated in contract or collective agreement. |
| Performance Bonus | Bonus based on employee performance, appraisal or KPI. | Usually discretionary unless promised in writing. |
| Company Bonus | Bonus based on company performance, profits or management decision. | Usually discretionary. |
| Retention Bonus | Bonus paid if employee remains employed until a required date. | Depends on the retention bonus terms. |
| Sign-on Bonus | Bonus paid when joining a company, sometimes with clawback terms. | Depends on the offer letter or contract. |
AWS vs performance bonus
AWS and performance bonus are often discussed together, but they are not exactly the same. AWS is commonly treated as a 13th month payment, while performance bonus usually depends on individual, department or company performance.
| Item | AWS / 13th Month | Performance Bonus |
|---|---|---|
| Main idea | Usually a fixed annual wage supplement. | Usually variable and performance-based. |
| Common amount | Often one month of salary if granted. | May be less than, equal to or more than one month salary. |
| Compulsory? | Only if stated in contract, collective agreement or policy. | Usually discretionary unless clearly guaranteed. |
| CPF and tax | May be subject to CPF and tax rules. | May be subject to CPF and tax rules. |
Is AWS or 13th month bonus compulsory?
AWS is also called the 13th month payment. It is a single annual payment made on top of an employee’s normal annual salary. AWS is not compulsory by default. It depends on what is stated in your employment contract, collective agreement or company policy.
Contract says AWS is payable
If your contract gives a clear AWS entitlement, your employer should follow the agreed terms.
Contract is silent
If the contract does not mention AWS, the company may still choose to pay it as discretionary bonus.
Example amount
If your monthly salary is S$4,000 and your company pays 1 month AWS, your AWS is usually S$4,000 before CPF and tax.
Is performance bonus compulsory?
Performance bonus is usually not compulsory unless the contract or bonus scheme gives you a clear entitlement. Many companies use wording such as “discretionary bonus”, “subject to company performance” or “subject to management approval”. This means the final amount may depend on employer decision.
Is CPF payable on bonus?
CPF is generally payable on bonus for Singapore Citizens and Singapore Permanent Residents who are eligible for CPF. Bonus is usually treated as Additional Wages for CPF purposes. This means it may be subject to the CPF Additional Wage ceiling.
Important CPF reminder
Bonus CPF is not always simply 20% of the full bonus. CPF wage ceilings can affect how much of the bonus attracts CPF contribution. Your exact CPF amount depends on age, CPF eligibility, Ordinary Wages and Additional Wage ceiling.
How bonus connects with CPF wage ceilings
Bonus is commonly treated as Additional Wages for CPF planning. The amount of bonus that attracts CPF can depend on how much Ordinary Wage you earned during the year and the applicable Additional Wage ceiling.
| CPF Term | Simple Meaning | Why It Matters for Bonus |
|---|---|---|
| Ordinary Wages | Regular monthly wages such as monthly salary. | Your annual Ordinary Wages can affect the Additional Wage ceiling. |
| Additional Wages | Non-regular wages such as bonus, AWS and annual incentive payments. | Bonus CPF is usually checked under Additional Wage rules. |
| CPF wage ceiling | A limit on wages that attract CPF contributions. | Not every dollar of bonus necessarily attracts CPF if ceilings are reached. |
Want to estimate CPF on your bonus?
Use our Singapore bonus calculator to estimate bonus after employee CPF and tax planning assumptions.
Is bonus taxable in Singapore?
Bonus is generally part of employment income and may be taxable in Singapore. This includes AWS, performance bonus, incentive bonus and other employment-related bonus payments.
Tax residents
Bonus is usually added to annual employment income and taxed under resident progressive income tax rates.
Non-residents
Tax treatment may differ depending on tax residency, employment period and income type.
Annual tax impact
Bonus can increase annual chargeable income, which may increase your final income tax bill.
Do you get bonus if you resign?
Whether you receive bonus after resignation depends on the bonus terms. Some companies require employees to be in active employment on the bonus payment date. Others may require employees not to be serving notice at the time of bonus declaration or payout.
Guaranteed or discretionary
Check whether the bonus is guaranteed in writing or subject to management discretion.
Payout date condition
Some companies require you to remain employed until the bonus payout date.
Serving notice
Some bonus policies exclude employees who are serving notice when the bonus is declared or paid.
How does prorated bonus work?
Prorated bonus means the bonus is calculated based on the period you worked during the bonus year. This is common when employees join midway through the year, resign before year-end or are only eligible for part of the bonus period.
Simple prorated bonus formula
Monthly salary × bonus months × months worked ÷ 12. For example, if your salary is S$4,000, the company pays 1 month bonus, and you worked 9 months, a simple prorated bonus estimate is S$3,000.
Common bonus mistakes employees make
These are common mistakes employees make when planning for AWS, performance bonus, CPF on bonus and resignation timing.
Assuming bonus is automatic
Many bonuses are discretionary unless clearly stated in the employment contract or official bonus plan.
Ignoring CPF ceiling
CPF on bonus may be affected by Additional Wage ceiling rules, so the CPF amount may not be a simple flat percentage.
Resigning too early
Some companies require employees to remain employed until the bonus declaration or payout date.
Related Singapore calculators
Use these tools to estimate salary, CPF, income tax and bonus-related amounts.
Related Singapore salary guides
Learn more about CPF, tax, salary and employment planning in Singapore.
Frequently Asked Questions
Is bonus compulsory in Singapore?
Bonus is generally not compulsory unless it is stated in your employment contract, collective agreement or company policy.
Is AWS the same as 13th month bonus?
Yes. AWS is commonly known as the 13th month payment. It is a single annual payment on top of normal salary.
Is AWS compulsory in Singapore?
AWS is not compulsory by default. It depends on your employment contract, collective agreement or company policy.
Is CPF payable on bonus?
CPF is generally payable on bonus for CPF-eligible Singapore Citizens and PRs, subject to CPF wage ceiling rules.
Is bonus taxable in Singapore?
Bonus is generally treated as employment income and may be taxable as part of your annual income.
Do foreigners pay CPF on bonus?
Foreign employees who are not Singapore Citizens or PRs generally do not contribute CPF, so CPF usually does not apply to their bonus.
Can I get bonus if I resign before payout?
It depends on your bonus terms. Some companies require employees to still be employed on the payout date or not be serving notice.
How is prorated bonus calculated?
A simple prorated bonus estimate is monthly salary × bonus months × months worked ÷ 12. Actual company policy may use a different method.
Does bonus affect income tax?
Yes. Bonus increases your annual employment income, which may increase your income tax depending on your total chargeable income and tax residency.
Is this bonus guide official advice?
No. This guide is for general salary planning only. Check MOM, CPF Board, IRAS, your employment contract or HR policy for official treatment.