Deduction from Salary in Singapore

No deductions other than those allowed under the Act or ordered by the Court, can be made by an employer. The employer should recover any compensation from the employee's directly, rather than through a salary deduction.

The authorized deductions from salary allowed under the Act are:

a) For absence from work.

b) For damage to or loss of goods entrusted to an employee for his custody, or for loss of money which an employee is accountable for, where the damage or loss is directly attributable to his neglect or default. This is to be determined by an inquiry to be held by the employer. No deductions shall be made unless the employee has been given an opportunity to explain the cause of the damage or loss and his reasons why the deductions should not be made. Except with the permission of the Commissioner for Labor, the total amount of such deductions must not exceed 25% of the employee's one month's salary, and such deductions may only be made on a once-off basis.

c) For cost of meals supplied by the employer at the request of the employee.

d) For house accommodation or for amenities and services supplied by the employer and accepted by the employee. Deductions must not exceed the value of the accommodation, amenity or service supplied.

e) For the recovery of advances, loans or adjustment of overpayments of salary. Advances may be recovered in installments by deductions from salary spread over not more than twelve months. Each installment shall not exceed 25% of the salary due to the employee for the salary period.

f) For income tax payment.

g) For CPF contributions.

h) For contributions to superannuation scheme or provident fund or any other scheme at the request of the employee in writing. However, these schemes must be lawfully established for the benefit of the employee and are approved by the Commissioner for Labor.

i) For payments to any registered co-operative society with the written consent of the employee.

j) For any other purpose which may be approved upon application from time to time by the Minister for Manpower.


Maximum Amount of Deductions
The maximum amount of deductions in respect of any one salary period is 50% of his salary but this does not include deductions made for:

a) Absence from work;

b) Payment of income tax;

c) Recovery of advances/loans; and

d) Payments with the consent of the employee, to registered co-operative society in respect of subscriptions, entrance fees, installment of loans, interest and other dues payable.

However, when the contract of service is terminated, the deduction from the employee's last payment of salary may exceed 50%. This is to enable the employer to recover any sum of money owed by an employee to him.