Employment Act · 2026 Revised Edition · Part · Payment of Salaries
47. Deductions for damages or loss
In plain English
Not legal advice
A deduction for loss or damage caused by an employee's neglect or default cannot exceed the employer's actual loss. Without the commissioner's approval, it cannot exceed one-quarter of one month's salary. The employee must first have a chance to argue against the deduction. The employer must record these deductions in a register.
Summary · Drafted with AI, checked against the official text on 30 Sep 2026.
Official textFrom Attorney General's Chambers, unchanged
A deduction under section 45(1)(b) shall not exceed the amount of the damage or loss caused to the employer by the neglect or default of the employee and, except with the approval of the Commissioner, shall in no case exceed one-quarter of one month’s salary and shall not be made until the employee has been given an opportunity of showing cause against the deduction.
employer
“employer” means any person who employs another person under a contract of service and includes — (a) the Government, in respect of such categories, classes or descriptions of public officers or employees of the Government as are declared by the Minister, with the approval of His Majesty the Sultan and Yang Di-Pertuan, to be employees for the purposes of this Act; (b) any statutory body; (c) the duly authorised agent or manager of the employer; (d) the person who owns or is carrying on or for the time being responsible for the management of the profession, business, trade or work in which the employee is engaged;
All such deductions and all realisations thereof shall be recorded in a register to be kept by the employer in such form as the
Commissioner may determine.
Commissioner
“Commissioner” means the Commissioner of Labour appointed under section 3(1);
Terms defined in s 2
Commissioner
Defined · s 2“Commissioner” means the Commissioner of Labour appointed under section 3(1);
employee
Defined · s 2“employee” means a person who has entered into or who works under a contract of service with an employer, and includes a workman and any public officer or employee of the Government included in a category, class or description of such officers or employees declared by the Minister, with the approval of His Majesty the Sultan and Yang Di-Pertuan, to be employees for the purposes of this Act or any Part thereof; but does not include any seaman, domestic worker or any person employed in a managerial, executive or confidential position or any person belonging to any other class of person whom the Minister, with the approval of His Majesty the Sultan and Yang Di-Pertuan, may by notification published in the Gazette, declare not to be employees for the purposes of this Act;
employer
Defined · s 2“employer” means any person who employs another person under a contract of service and includes — (a) the Government, in respect of such categories, classes or descriptions of public officers or employees of the Government as are declared by the Minister, with the approval of His Majesty the Sultan and Yang Di-Pertuan, to be employees for the purposes of this Act; (b) any statutory body; (c) the duly authorised agent or manager of the employer; (d) the person who owns or is carrying on or for the time being responsible for the management of the profession, business, trade or work in which the employee is engaged;
salary
Defined · s 2“salary” means all remuneration including allowances payable to an employee in respect of work done under his contract of service, but does not include — (a) the value of any accommodation or the supply of any food, fuel, electricity, water or medical attendance, or of any amenity or service excluded by order of the Minister published in the Gazette; (b) any contribution paid by the employer on his 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 for special expenses incurred by him in the course of his employment; (e) any gratuity payable on discharge or retirement; and (f) any retrenchment benefit payable on retrenchment;
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