The salary formula for Ministerial salaries is set out in a White Paper on “Salaries for a Capable and Committed Government” tabled in Parliament. It features fixed and variable pay components which are linked to individual performance and national outcomes, i.e. 

Annual Salary = Fixed (13 months) 

+ Annual Variable Component (typically 1 month) 

+ Individual Performance Bonus (typically 3 months for good performance) 

+ National Bonus (typically 3 months if targets are met) 

= 20 months. 

The salaries of the appointment holders are performance-linked, to ensure that the leaders are accountable for their roles and responsibilities. The salaries are also linked to the socio-economic outcomes of Singaporeans through the National Bonus. 

As of 2011, when the Ministerial salaries were last adjusted, the reference monthly salary for a MR4 Minister (mid-point of the range) was S$55,000. This works out to an annual salary package of $1,100,000. The fixed salary is $715,000, and the rest are variable based on individual performance and the National Bonus. 

A Minister may start at the lower end of the MR4 range with a monthly salary of $46,750. This works out to an annual salary of $935,000, of which $607,750 is fixed and the rest are variable based on individual performance and the National Bonus.  

There is no Performance Bonus for the Prime Minister as there is no one to assess his individual performance. But to keep to the principle of making a significant part of the Prime Minister’s total pay subject to performance, his variable pay has twice the National Bonus component compared to other Ministers, linking it to national outcomes. 

The National Bonus is determined equally by the four national indicators laid out in the White Paper: namely, the real median income growth rate of Singaporeans; the real growth rate of the lowest 20th percentile income of Singaporeans; the unemployment rate of Singaporeans; and the real GDP growth rate. 

The political salaries framework in the White Paper covers the salaries of the President, Prime Minister, Speaker of Parliament, Deputy Speaker of Parliament, political appointment holders, Members of Parliament (MPs), Non-Constituency MPs (NCMPs) and Nominated MPs (NMPs). 

The political salaries framework and salaries have not been adjusted since they were in effect in 2011. While a review of political salaries was to be conducted approximately every five years, the Government decided not to adjust political salaries in 2017, and also deferred the review in 2023, given the uncertain environment and the downside risks in the global economy at that time.