When deductions may be required
Your employer may be required to deduct your salary:
- By court order, or other valid authority.
- If your employer is declared an agent for the recovery of income tax, property tax or goods and services tax (GST) payable by you.
Note: Any compensation should generally be recovered directly from you, rather than through a salary deduction.
Types of deductions allowed
Your employer can deduct your salary only for the following reasons:
- For absence from work. For a monthly-rated employee, your salary may be deducted for authorised and unauthorised absence. Calculate your deductions for:
- For damage or loss of goods or money. Your salary will be deducted if you damage or lose goods or money that you are responsible for. Before deducting your salary, your employer should:
- Hold an inquiry to determine if you are directly at fault.
- Not make any deductions until you have had the opportunity to explain the cause of the damage or loss.
- Not deduct more than 25% of your 1 month's salary. The deduction must be made as a one-time lump sum payment.
- For cost of meals supplied at your request.
- For supplying accommodation, amenities and services that you have accepted. Deductions must not exceed the value of the item supplied and 25% of your 1 month's payable salary.
- For recovering advances, loans or overpaid salary.
- For advances, your employer can deduct your salary in instalments spread over not more than 12 months. Each instalment should not exceed 25% of your salary for the salary period.
- For loans, your employer can deduct your salary in instalments. Each instalment should not exceed 25% of your salary for the salary period.
- For overpaid salary, your employer can recover the full amount from you.
- For CPF contributions.
- For contributions to a scheme at your written request. The scheme must be lawfully established for the benefit of employees and approved by the Commissioner for Labour. Examples include a superannuation scheme or provident fund.
- For payments to any registered co-operative society with your written consent.
- For any other purpose. Your employer must first get approval for the deduction from the Minister for Manpower.
Maximum amount of deductions
Your employer cannot deduct more than 50% of your total salary payable in any one salary period.
This does not include deductions made for:
- Absence from work.
- Recovery of advances or loans.
- Payments, with your consent, to registered co-operative societies for subscriptions, entrance fees, loan instalments, interest and other dues payable.
However, when your contract of service is terminated, any deduction from your last salary payment may exceed 50%. This enables your employer to recover any sum of money you owe.