1) Would like to enquire if AWS (annual wage supplement) is calculated based on Basic pay (exclude allowance) or Gross salary (include monthly allowance)?
AWS is calculated based on Basic Pay, exclude monthly allowance.
2) If my staff worked for 5 years, is it true that AWS cannot be paid more than 1 month?
Annual Wage Supplement (AWS), commonly known as the 13th month payment, the payment of AWS depends on the contractual agreement between the employer and the employee. If it is not stipulated in the employment contract, AWS payment should base on the mutual agreement between employer and employee, or the trade union representing the employee.
Below is the additional information on the AWS quantum.
Employer is not allowed to pay AWS of more than 3 month’s salary if:
- Employer agreed (either by way of an employment contract or collective agreement) to pay an AWS of up to 3 months' wages before the commencement of the Employment (Amendment) Act 1988 on 16 August 1988.
- However, employer can negotiate with the employee, or the trade union representing employee, to vary the quantum.
Employer is not allowed to pay AWS of more than 1 month’s salary if:
- Employer not paid any AWS prior to 16 August 1988
