We wrote about what is good pay in Singapore, where the average monthly salary of a typical Singaporean worker is $ 5,877 (including employer’s CPF).
While it is good to know where you stand in relation to your individual salary, a better number is your household income.
The median monthly household income measures the total income of all people who live under one roof.
It includes all forms of income such as salaries, employer’s CPF wage contributions, and investment income.
TL; DR: The median household income in Singapore is $ 7,744
- Household income is the sum of the gross income of all members of a household.
- For households with at least one employed person, the median household income for Singaporeans is $ 7,744
- The median household income from employment per household member is $ 2,463.
- The average household income in 2010 was US $ 5,600, an increase of 1.9 percent when adjusted for inflation.
- 13.3 percent of households in Singapore have no monthly earned income. These are households with no employed persons.
We usually use the median for better presentation, as the average income of top earners is often skewed.
Where do you stand next to the rest of the Singaporeans?
The Average Singaporean Household Income: Where Are You At?
The median household income in 2020 is $ 7,744.
It rose from $ 5,600 in 2010, an increase of 1.9 percent per year when adjusted for inflation.
That means, if you add the monthly income of everyone in your household and it exceeds $ 7,744, you are better off than 50 percent of the households out there.
The median monthly household income is $ 10,608 (average = total divided by total number of households).
13.1 percent of households have no gainfully employed persons, compared to 10.5 percent in 2010.
ALSO READ: Singapore Census: Higher Household Income, But Does More Money Mean More Problems?
Distribution of Singaporeans in relation to monthly household income
| Monthly household income from work | Resident households (percent) | Percentage difference | |
|---|---|---|---|
| 2010 | 2020 | ||
| Under $ 1,000 | 3.5 percent | 2.0 percent | -1.5 percent |
| $ 1,000 to $ 2,999 | 15.2 percent | 10.2 percent | -5.0 percent |
| $ 3,000 to $ 4,999 | 16.2 percent | 10.6 percent | -5.6 percent |
| $ 5,000 to $ 6,999 | 14.1 percent | 10.4 percent | -3.7 percent |
| $ 7,000 to $ 8,999 | 10.8 percent | 9.4 percent | -1.4 percent |
| $ 9,000 to $ 10,999 | 8.0 percent | 8.4 percent | +0.4 percent |
| $ 11,000 to $ 12,999 | 5.6 percent | 6.8 percent | +0.8 percent |
| $ 13,000 to $ 14,999 | 3.9 percent | 5.6 percent | +1.7 percent |
| $ 15,000 to $ 17,499 | 3.5 percent | 5.6 percent | +2.1 percent |
| $ 17,500 to $ 19,999 | 2.2 percent | 4.0 percent | +1.8 percent |
| $ 20,000 and more | 6.6 percent | 13.9 percent | + 7.3 percent |
Monthly household income has generally increased since 2010, with the proportion of resident households increasing with incomes less than $ 6,999 and increasing the proportion of households with incomes of $ 7,000 and above.
The proportion of resident households earning at least $ 9,000 increased significantly from 29.7 percent in 2010 to 44.2 percent in 2020.
The biggest change has been seen for the group earning $ 20,000 and more, with the numbers more than doubling from 6.6 percent to 13.9 percent.
Median monthly household income per person
It might be inaccurate if we only looked at median monthly household income, as the number of members in a household varies.
Another method is to look at median household income per person.
[[nid:518166]]
The monthly household income per person is calculated by dividing the total monthly gross income of the households by the total number of family members living under one roof.
The median household income per household member increased from $ 1,638 in 2010 to $ 2,463 in 2020.
This corresponds to an inflation-adjusted growth of 2.8 percent pa.
So if your household income per household member is over $ 2,463, you are better off than 50 percent of Singapore households.
On the flip side, the median household income per person is $ 3,488.
What does it mean to you?
“What you do with your income is important.”
Falling below the median household income does not necessarily mean that you are poor.
In fact, we know of more Singaporeans who are poor despite higher incomes.
This is because people with higher salaries often spend more due to lifestyle inflation.
So it’s more important to look at the savings rate instead.
Ideally, as your income rises, so should your savings rate.
Ultimately, we should aim for the increase in expenditure to be less than the increase in income.
What can you do about it?
If you fall below the median household income, there are a few ways you can not get in your way:
- To protect your own savings, take out adequate insurance so that your financial safety net is in place.
- Household income includes all forms of income, including investment income. You can try to increase your household income by investing.
- Simple things like the best savings account for those extra interest rates can help you in the long run.
- Married couples can try to come up with a potential budgeting formula that will help them save better for their household. Here is one of the methods we wrote about that can help a couple save an additional $ 120,000!
- Another life hack for Singaporeans would be to use free course points to improve themselves in terms of knowledge and skills, which could accelerate your earning power.
- Set your personal financial goals and know what you are working towards and what you are working hard for.
This article was first published in Seedly.
