“Wa lao eh, this year no 13th month bonus again.”
Hold on, before we start whining about not receiving our 13th month, let’s understand more about this 13th month bonus, aka AWS
What exactly is the 13th month bonus?
Workers used to receive weekly salary, when the British moved from weekly wages to monthly wages, 13th month bonus was created to make up for the extra 4 weeks.
If you count by weeks, there are 52 weeks a year but we are only paid 12 months. Assuming each month has 4 weeks, we are only paid 48 weeks.
Most companies in Singapore offer a monthly salary so the 13th month bonus is no longer an issue anymore.
Is the 13th month bonus compulsory?
According to the Ministry of Manpower, the 13th month “bonus”, also known as Annual Wage Supplement (AWS), is not compulsory. The payment solely depends on what is in your employment contract or the collective agreement that your company has with the union, if your company is unionised.
If it’s not written in black and white, your employer is not obligated to pay you a 13th month bonus. However, employers are encouraged to give their employees bonuses to reward them for their contributions to the company.
If business results are really poor, your employer may negotiate for a lower amount of AWS to be paid out to employees.
Having said all this, it is better to negotiate your salary in yearly package instead of monthly salary and hope for the 13th month “bonus”.
Yearly package should includes your basic monthly salary, performance bonus, annual salary adjustment, annual variable component and any other miscellaneous bonuses – transport, and food allowances etc.
Be it high AWS or low AWS, companies which are profitable should give AWS, especially to the low-wage workers. This means a lot to them during the festive session.
“If you take care of your employees, they’ll take care of your business.” – Richard Branson
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