Permitted grounds
Under the Employment Act, salary deductions require a permitted basis. A court order or other lawful authority may require deduction, including where the employer is appointed to recover the employee’s income tax, property tax or GST. Compensation should generally be recovered directly rather than deducted from salary.
| Reason | Requirements |
|---|---|
| Absence | Authorised absence uses incomplete-month calculation; unauthorised absence uses the gross-rate calculation. |
| Damage or loss of entrusted goods or money | Conduct an inquiry, establish direct fault and allow an explanation before deduction. One lump-sum deduction must not exceed 25% of one month’s salary. Tools, equipment and vehicles are included. |
| Accommodation | Employee must accept it; combined accommodation and approved amenities deductions cannot exceed their value or 25% of salary for the period. |
| Amenities and services | Employee acceptance and prior Commissioner for Labour approval are required. Examples include additional childcare or recreation beyond what the employer must reasonably provide. |
| Advance | Repay over no more than 12 months; each instalment no more than 25% of period salary. |
| Loan | Instalments cannot exceed 25% of period salary. |
| Overpaid salary or unearned benefits | The full amount may be recovered. |
| Employee CPF share | Deduct from the correct month’s salary under the CPF Act. |
| Registered co-operative society payments | Written consent is required. |
| Other beneficial deductions | Written consent must be freely withdrawable at any time. The deduction must benefit the employee and comply with other laws; liquidated damages and foreign-worker levy recovery are not permitted. |
Overall limit and historical approvals
Normally deductions in a salary period cannot exceed 50% of total salary payable. Absence, recovery of advances or loans, overpaid salary or unearned benefits, and consented payments to registered co-operative societies are excluded from this overall limit. On termination, authorised deductions may exceed 50% of final salary.
Minister-approved deductions granted before 1 April 2019 lasted until their stated expiry. Approvals with no stated period expired on 30 September 2019. Continuing those deductions after that date requires employee written consent.
Migrant-worker rules
Reducing salary or introducing or increasing deductions requires written employee consent and notification to MOM. Use WP Online for Work Permit holders; for EP or S Pass holders submit through EP eService one month before a salary reduction. Salary cannot be changed before the Work Permit is issued. Under the Employment of Foreign Manpower Act, employers cannot deduct costs as a condition of employment or continued employment, or recover work-pass renewal, security bond, medical insurance, repatriation, compulsory training, medical fees or levy costs.