What does Myanmar law say about wage deductions?
Myanmar's Payment of Wages Law permits four categories of deduction — statutory (PIT, SSB), authorised (advances, loans, court-ordered garnishments), damages (only with written employee agreement), and absence (pro-rated unpaid leave). Total non-statutory deductions are typically capped at 50% of monthly wages. Each deduction must be itemised on the payslip.
What Myanmar law says
The Payment of Wages Law permits the following categories of deduction from wages, in this order:
- Statutory — PIT (Union Tax Law), SSB employee contribution (Social Security Law).
- Authorised — salary advances, loans from the employer (with written agreement), court-ordered garnishments.
- Damages — only with the employee's written agreement, not exceeding the limits set by the law.
- Absence — pro-rated unpaid leave for unauthorised absence.
Total non-statutory deductions are typically capped at 50% of monthly wages to ensure the employee receives meaningful net pay. The employer cannot withhold the full salary as a "fine".
Worked example — MMK 800,000/mo gross
| Component | Amount (MMK) | Category |
|---|---|---|
| Gross wages | 800,000 | — |
| Less: PIT | (15,000) | Statutory |
| Less: SSB 2% (capped MMK 6,000) | (6,000) | Statutory |
| Less: salary advance repayment | (50,000) | Authorised |
| Less: agreed damages instalment | (20,000) | Damages |
| Less: unauthorised absence (1 day) | (30,769) | Absence |
| Net pay | 678,231 | — |
Non-statutory deductions total MMK 100,769 — well within 50% of gross. Each line is itemised on the payslip.
Documentation requirements
- Written employee agreement for damages or loans.
- Court order for garnishments.
- Payslip itemising every deduction line separately.
- Wage register entry for the period.
- Record retention: at least 7 years.
Edge cases
- Court-ordered garnishment — sits outside the 50% cap; pay the order.
- Damage without written consent — not permitted; recover via dispute resolution instead.
- Partial-month absence — pro-rate at daily rate (monthly basic ÷ 26 working days).
- Recovery of training cost on early exit — only if the contract has a clear bond clause.
- Tools or uniform damage — written agreement required; can be repaid in instalments.
- Salary cap — if total non-statutory deductions exceed 50%, schedule the rest for the next month.
Employer takeaway
Permitted deductions: statutory (PIT, SSB), authorised (advances, loans, garnishments), damages with written consent, and pro-rated absence. Total non-statutory cap: ~50% of monthly wages. Itemise every line on the payslip, keep written consent and wage register, and pay net wages by the 7th of the following month. Withholding without basis is a Payment of Wages Law violation.
Common payroll mistakes
- Deducting damages without written consent — Payment of Wages Law violation.
- Pushing total deductions past 50% in a single month.
- Skipping the payslip itemisation, leaving employees unable to see the breakdown.
- Treating "fines" as a deduction category — they are not (see deducting for damages).
- Withholding net pay pending exit clearance (see withhold for exit clearance).
- Payment of Wages Law — permitted deductions and cap
- Union Tax Law 2025-2026 — PIT withholding
- Social Security Law 2012 — SSB contribution
Related questions
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