As we approach the final week of 2025, Singapore’s business community is looking toward two critical milestones: the closing of the Budget 2026 public consultation on January 12th and the immediate “Stage 2” refresh of the COMPASS framework on January 1, 2026.

For directors, this isn’t just a regulatory update; it is a financial turning point. Here is how the intersection of government policy and manpower costs will define your 2026 strategy.

1. Budget 2026: The SME “Wishlist” for Growth

The Ministry of Finance (MOF) is currently inviting businesses to shape the upcoming Budget. Based on the current economic climate in December 2025, the “High Intent” topics for SMEs include:

  • Manpower Cost Offsets: With the rising salary benchmarks for foreign talent, many SMEs are calling for extended “Transition Support” to manage wage bills.
  • AI & Digitalisation Grants: Expect a shift from general digital grants to specific “AI-Ready” incentives. Now is the time to review your Corporate Secretarial & Compliance records to ensure you are eligible for the next wave of government funding.
  • Rental and Utility Support: Targeted relief for retailers and F&B operators continues to be a top priority in the 2026 wishlist.

The Excellence SG Strategy: If your accounts aren’t “grant-ready” by the time the Budget is announced in February 2024, you will miss the first window of applications. We recommend a Full Accounting Audit now to ensure compliance for YA 2026.

2. The January 1st Manpower “Crunch”: Beyond Benchmarks

While we have previously covered the technical details of the COMPASS 2026 Salary Benchmarks, the strategic impact starting January 1, 2026 is about Cash Flow Management.

A. The Cost of Talent Retention

Starting New Year’s Day, the “65th percentile” requirement for EP salaries becomes more stringent in several high-growth sectors.

  • The Financial Impact: For many firms, this means a mandatory salary increment for existing EP holders whose permits expire after July 1, 2026.
  • Budgeting Tip: You must factor in these salary adjustments into your Q1 2026 budget now to avoid a “renewal shock” later in the year.

B. The Revised Shortage Occupation List (SOL)

The SOL has been refreshed for 2026 to include more roles in Sustainability and Green Finance.

  • The Opportunity: If your business is pivoting toward the “Green Economy,” you may actually find it easier to hire foreign experts due to the 20-point bonus these roles provide. This aligns perfectly with the anticipated “Green Grants” likely to be featured in Budget 2026.

3. Preparation Checklist for January 2026

To stay ahead of the curve, Directors should focus on these three actions before the year ends:

  1. Submit Your Feedback: Visit the REACH portal before January 12, 2026, to voice your concerns regarding SME operating costs.
  2. Pre-Audit EP Renewals: Review any EPs expiring in 2026 against the new benchmarks. If a salary hike isn’t feasible, you need to explore Company Incorporation strategies for local hiring or restructuring.
  3. Clean Up Compliance History: ACRA and MOM are sharing data more aggressively in 2026. A “clean” compliance record is now a prerequisite for smooth EP approvals and grant applications.

Infographic diagram showing the strategic map for Singapore SMEs in 2026, connecting Budget 2026 fiscal policy with January 1st MOM manpower updates for business growth

Conclusion: A Strategic New Year

2026 will be a year of “Targeted Support.” The government is moving away from broad-based subsidies toward specific incentives for high-growth, high-productivity firms. By aligning your manpower and financial strategy with the Budget 2026 priorities, you turn a “crunch” into a competitive advantage.

Want to know if your business is “Budget Ready” for 2026? Contact Excellence Singapore for a Comprehensive Business & Manpower Audit.