Withholding of Salary


Dear HR Professionals,

Please advise for employees who are leaving the company (could be a resignation case or a termination case), if he/she fails to return the company asset and leaves the company, can HR withhold the last drawn salary or deduct the asset amount from the last payout?

Thank you.





Cannot withhold but can deduct an amount not more than 25% of 1-month salary after holding an inquiry or giving the employee time to return asset.





Yes, the company can deduct it from the last pay. We will inform the staff to return if the staff refuse or fails due to any reason, then we will take it as the staff didn't return and we will report to the police and deduct it from their salary. It will be better if there are some acknowledgement forms which stating staff have to responsible for company property that hands over to him.

"For damage or loss of money or goods including work gear, tools, equipment, and vehicles. Your salary will be deducted if you damage or lose such 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. Do 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" - From the MOM Website.


In general, it is not the standard practice for HR to withhold an employee's last drawn salary due to non-return of company belongings upon resignation or termination. However, the specific approach to such a scenario may depend on the terms outlined in the employee's contract and the company's policies, as well as applicable laws within the respective country.

In Singapore, for example, the Employment Act stipulates that employers must pay all outstanding salaries to an employee within seven days after the last day of employment. Withholding the last drawn salary can have legal implications unless it is supported by contractual terms agreed upon by the employee.

If an employee does not return company property, the company may pursue other avenues to retrieve their belongings or seek compensation, such as deducting the cost from the final salary, but only if this is explicitly stated in the employment contract and agreed upon by the employee.

For comprehensive advice on handling such situations within the framework of labour laws in Singapore, it is advisable to consult HR experts. At HRSINGAPORE, we offer HR Consultancy Services that can provide tailored guidance on such matters. Moreover, our HRLAW Seminars, HR Training courses, and HR Certification programs can equip you with the necessary knowledge and skills to navigate these complex issues effectively.

For further assistance in managing the return of company property and understanding the legal implications of withholding salary, I suggest utilizing HRSINGAPORE's HR Consultancy Services. Additionally, you may consider enrolling in our HR Certification programs and HRLAW Seminars for a deeper understanding of employment regulations.

Visit our website at hrsingapore.org for more information on our HR Certification, HRLAW Seminars, HR Training courses, and HR Consultancy Services.


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