Employment Act 1968 · 2020 Revised Edition · Part 3 · Payment of Salary
27. Authorised deductions
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Deductions from salary are allowed for absence from work, certain loss or damage due to the employee's neglect or default, and recovering advances or loans. Some deductions, such as for housing the employer supplies, need the employee's written consent. The employee may withdraw this consent by written notice before the deduction is made and cannot be penalised for doing so.
Summary · Drafted with AI, checked against the official text on 30 Sep 2026.
Last amended by an amending law of 2018. 2 amendments in all.
The following deductions may be made from the salary of an employee:
salary
“salary” means all remuneration including allowances payable to an employee in respect of work done under his or her contract of service, but does not include —(a)the value of any house accommodation, supply of electricity, water, medical attendance, or other amenity, or of any service excluded by general or special order of the Minister published in the Gazette;(b)any contribution paid by the employer on his or her own account to any pension fund or provident fund;(c)any travelling allowance or the value of any travelling concession;(d)any sum paid to the employee to reimburse him or her for special expenses incurred by him or her in the course of his or her employment;(e)any gratuity payable on discharge or retirement; and(f)any retrenchment benefit payable on retrenchment;
deductions for absence from work;
deductions for damage to or loss of goods expressly entrusted to an employee for custody or for loss of money for which an employee is required to account, where the damage or loss is directly attributable to the employee’s neglect or default;
[Deleted by Act 55 of 2018]
deductions made with the employee’s written consent for house accommodation supplied by the employer;
deductions made with the employee’s written consent for such amenities and services supplied by the employer as the Commissioner may authorise;
any deduction for the recovery of any advance, loan or unearned employment benefit, or for the adjustment of any overpayment of salary;
[Deleted by Act 26 of 2013]
deductions of contributions payable by an employer on behalf of an employee under and in accordance with the provisions of the Central Provident Fund Act 1953;
any deduction (other than a deduction mentioned in paragraphs (a) to (h), (j) and (k)) made with the employee’s written consent;
deductions made with the employee’s written consent and paid by the employer to any cooperative society registered under any written law for the time being in force in respect of subscriptions, entrance fees, instalments of loans, interest and other dues payable by the employee to such society;
any other prescribed deductions.
An employee’s written consent for any deduction mentioned in subsection (1)(d), (e), (i) or (j) may be withdrawn by the employee giving written notice of the withdrawal to the employer at any time before the deduction is made.
employee
“employee” means a person who has entered into or works under a contract of service with an employer and includes a workman, and any officer or employee of the Government included in a category, class or description of such officers or employees declared by the President to be employees for the purposes of this Act or any provision thereof, but does not include any of the following:(a)any seafarer;(b)any domestic worker;(c) (d)any person belonging to any other class of persons whom the Minister may, by notification in the Gazette, declare not to be employees for the purposes of this Act;
An employee cannot be penalised for withdrawing a written consent for any deduction mentioned in subsection (1)(d), (e), (i) or (j).
In subsection (1)(e), “services” does not include the supply of tools and raw materials required for the purposes of employment.
In subsection (1)(f), “employment benefit” —
means any benefit that an employee derives from being employed, other than salary; and
includes (but is not limited to) benefits such as the following:
any annual leave in excess of the annual leave to which the employee is entitled under section 88A;
any flexible employment benefit (such as an allowance that can be utilised, at the employee’s discretion, for any of certain purposes specified in the employee’s contract of service).