1. What is Monthly Variable Component? Monhtly Variable Component (MVC) is a variable component in wage built-up over the years from annual wage increases. It is included in computation of overtime payment, CPF contribution and annual variable bonus (AVB). It applies to all levels of employees.

2. Why do I need MVC ? MVC helps to enhance the flexibility of our salary system so that we can be more responsive when we meet with an economic downturn or recession. This helps to minimise job losses.

3. How will MVC affect Employees ?  MVC forms part of an employee’s monthly take home pay. For example, if MVC is 10% and the employee’s take home pay is $1000, $900 accounts for monthly basic component and $100 accounts for MVC. In total, the employee continues to bring home $1000 per month.   In a recession, employees might take a MVC cut either fully or partially depending on the severity of the business downturn. For example, if employer cuts MVC by 5%, employee will take home $950, inclusive of $900 monthly fixed component and $50 MVC. $950 will be used for computing CPF contribution and overtime payment.