The Law on Salary Withholding, Deductions and Bonus Entitlements
Salary and bonus are treated differently in Singapore. An employer generally cannot withhold earned salary simply because it is unhappy with an employee or is conducting an internal review. A bonus, however, often depends on the employment contract and scheme rules.
When must salary be paid?
The Employment Act 1968 covers most employees, although some exclusions apply (domestic workers, seafarers, and statutory board/government employees). Since amendments effective 1 April 2019, the Act's core protections — including payment of salary and deductions — apply to all employees regardless of salary level; only the additional Part IV protections on hours of work, overtime and rest days are limited to workmen earning up to S$4,500 a month and other employees earning up to S$2,600 a month.
Under section 21, an employee covered by the Act must generally be paid at least once a month and within seven days after the end of the salary period. Overtime pay must generally be paid within 14 days.
An investigation does not create a general right to hold all salary indefinitely. Any suspension, deduction or withholding must have a lawful basis and comply with the relevant requirements.
When can deductions be made?
Sections 26–31 of the Employment Act permit specified deductions, including for absence (s 28), recovery of advances and loans made to the employee (s 31), CPF contributions, and certain damage or loss caused by the employee (s 29). An employer cannot create a new category of deduction merely by inserting broad wording in a contract - section 26 makes unauthorised deductions unlawful.
Under section 32, total authorised deductions generally cannot exceed 50% of the salary payable in one salary period, subject to statutory exceptions - notably, this 50% cap does not apply to deductions made from the last salary payment due on termination or completion of the contract of service. For damage or loss, the employer must conduct an inquiry, give the employee an opportunity to explain, and comply with the applicable limits.
When is final salary due?
Under sections 22 and 23: if an employee resigns and serves the required notice, final salary is generally due on the last day of employment. If the employee resigns without serving notice, it is generally due within seven days. If the employer terminates or dismisses the employee, it is generally due on the last day, or within three working days if payment that day is not possible.
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Is a bonus compulsory?
A bonus or Annual Wage Supplement is not compulsory unless provided for in the employment contract or collective agreement. A guaranteed bonus, or one earned under an objective formula, is different from a scheme that genuinely reserves discretion to management.
The word "discretionary" matters, but the entire clause, eligibility conditions, plan documents, communications and the way the discretion was exercised may also be relevant. Past practice does not automatically make every future bonus guaranteed.
What should you do?
Check the contract, bonus letter, payslips, handbook, performance records and the employer's calculation. Ask in writing for the contractual or statutory basis of any deduction.
Where do salary and bonus disputes go, and what can you recover?
Salary-related claims generally begin with mediation at the Tripartite Alliance for Dispute Management (TADM) and, if unresolved, proceed to the Employment Claims Tribunals (ECT). A person who remains employed generally must file within one year after the dispute arose; a former employee generally must file within six months after the last day of employment. The ECT's jurisdiction is capped at S$20,000 per claim, or up to S$30,000 where the claim has gone through the Tripartite Mediation Framework or union-assisted mediation under the Industrial Relations Act 1960 — claims above that must be pursued in the civil courts instead.
Key takeaway
Earned salary cannot usually be held back without a lawful reason under Part III of the Employment Act. Bonus disputes are more fact-specific and usually turn on the documents. Preserve the records and act promptly, bearing in mind the ECT's claim caps when deciding where to bring a dispute.