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Deduction from Salary due to Tax Adjustment

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1 Deduction from Salary due to Tax Adjustment on Sat Jan 15, 2011 4:54 am


Reclusion Perpetua
I have a friend who works in Company XYZ. On the December 31 payroll, he found out he received only 2,000 pesos because of an 8,000 peso tax adjustment at year-end. the reason for the adjustment was a computer glitch which undertaxed him for a few months.

Is there a legal cap for these types of deductions at year-end?

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i would first try to ask for a computation to show that the deduction was warranted in the first place.

i am not aware of any provision which directly answers this question. what the omnibus rules contemplate where only 20% per week can be deducted is for damages caused by the employee. in my opinion, while it will be a great inconvenience for the employee, a full deduction will be held valid.

SECTION 13. Wages deduction. — Deductions from the wages of the employees may be made by the employer in any of the following cases:

(a) When the deductions are authorized by law, including deductions for the insurance premiums advanced by the employer in behalf of the employee as well as union dues where the right to check-off has been recognized by the employer or authorized in writing by the individual employee himself.

(b) When the deductions are with the written authorization of the employees for payment to the third person and the employer agrees to do so; Provided, That the latter does not receive any pecuniary benefit, directly or indirectly, from the transaction.

SECTION 14. Deduction for loss or damage. — Where the employer is engaged in a trade, occupation or business where the practice of making deductions or requiring deposits is recognized to answer for the reimbursement of loss or damage to tools, materials, or equipment supplied by the employer to the employee, the employer may make wage deductions or require the employees to make deposits from which deductions shall be made, subject to the following conditions:

(a) That the employee concerned is clearly shown to be responsible for the loss or damage;

(b) That the employee is given reasonable opportunity to show cause why deduction should not be made;

(c) That the amount of such deduction is fair and reasonable and shall not exceed the actual loss or damage; and

(d) That the deduction from the wages of the employee does not exceed 20 percent of the employee's wages in a week.

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