No civil servant year-end bonus in 2020: What does this mean?

Though you wouldn’t know it from the Black Friday crowds at Orchard and the appetite for $1K flights to Hong Kong, Singapore’s economy is clearly in tatters. The proof? Civil servants get no year-end bonus in 2020.

The civil service is known for their generous year-end bonuses, but 2020 is an exception. Here’s the lowdown.

Singapore civil servant year-end bonus 2020

From the Public Service Division press release:

“In view of the ongoing challenging economic conditions, the Government, in consultation with the public sector unions, has decided that there will not be any year-end Annual Variable Component (AVC) payment for civil servants.”

There is no year-end bonus for civil servants in 2020. However, the usual “13th-month” payment is not affected — all civil servants will receive it.

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So this December, civil servants will get just a 2-month paycheck (regular monthly salary + 13th month).

To help out the lower-earning workers, the gov will give civil servants from Grades III to V of the Operations Support Scheme an extra one-time payment of $1,200 this year-end.

Oh, and by the way, civil servants usually get 2 rounds of bonuses: mid-year and year-end bonus. In 2020, there was no mid-year bonus for them either.

A brief history of Singapore civil servant bonuses

The lack of both mid-year and year-end bonus in 2020 is pretty significant. I looked through the Public Service Division’s archive, which dates back to 2006, and found no record of another no-bonus year.

Here’s a table of historical civil servant bonuses, excluding 13 month:

Notice that even during the last major recession, in 2009, civil servants still received a year-end bonus of 0.25 month, albeit capped at $750.

What about private sector year-end bonuses?

Even if you have no intention to work for Ah Kong, the 2020 civil servant bonus might still be of interest because private-sector bonuses usually take its lead.

And now that the gov has spoken, we can collectively expect to not receive any bonuses this year.

Unless you happen to work in a high growth sector. According to this Ministry of Trade & Finance press release, sectors that are doing all right are:

• Manufacturing (grew 10 per cent year-on-year)
• Finance & Insurance (3.2 per cent year-on-year)
• Infocomms (2 per cent year-on-year)

These sectors are expected to continue hiring and might hand out bonuses to continue attracting talent. (What, you didn’t think employers would give out bonuses for completely noble and selfless reasons, right?)

Obviously, any chance of a bonus also depends on the performance of your company and how willing its leaders are to share profits with their staff.

So if you’re working in a high-growth company (let’s say a face mask manufacturer) — but you’re getting absolutely nothing this year, it’s probably a sign that you should start sending your CV to competitors.

What’s the difference between bonus and AWS in Singapore?

While writing this, I realised that all my life, I’d been labouring (lol) under the impression that “year-end bonus” and “13th month” or “AWS” were the same thing.

In case you’re blur like me, here’s a quick and dirty guide to what the two are all about.

	AWS or 13th month	Bonus
What is it?	Extra month’s pay on top of employee’s annual pay	One-off payments to reward employees, e.g. performance bonus
Is it required by MOM?	No	No
How much is it?	Usually a month’s salary	Totally variable, at company’s discretion
When is it set?	Usually agreed on as part of the pay package in the employment contract	Typically end of the year, but can also be on an ad-hoc basis
Things to note	Employer can decide to negotiate and lower the amount if company performance is poor that year	Companies usually don’t guarantee bonuses

AWS, Annual Wage Supplement, 13th month, Non-Pensionable Annual Allowance — these are all different names for the same thing. It’s basically an extra month’s pay, often tacked onto your last paycheck of the year (or sometimes split into 12 payments and added to each month’s salary).

Some people speak of AWS as almost an entitlement, but actually, not all companies do this AWS thing. It’s not compulsory by law. Because of this discrepancy, it’s better to look at the annual rather than monthly number when you’re trying to figure out how much you get paid.

If you’re working in a company that practises AWS, your year-end paycheck is double the usual amount.

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But that does NOT mean you get a 1-month bonus. It’s something that was already pre-agreed when you signed the employment contract and is not affected by your work performance or your employer’s profit margin.

On the other hand, bonuses can be a totally random amount — not necessarily a month’s salary — and you might get them at a totally random time and for a random reason.

Unlike AWS, bonuses are not usually agreed on before you join the company and prove yourself. Instead, they’re sort of a gift that the employer gives you to say, “Hey, you did well at work this year, here’s a token of gratitude.”

Note that all your AWS and bonuses count towards your annual salary — you did earn all of it, right? So if you’re job-hunting, be sure to tally all that stuff up as you’re negotiating your pay package.

This article was first published in MoneySmart.