EP Salary Kickback: How MOM Prosecutes Employers Who Claw Back Declared Pay

Short answer: An EP salary kickback is any part of a declared salary that the employer deducts, demands or takes back from the pass holder. Singapore treats it as two separate problems: a false declaration under section 22(1)(d) of the Employment of Foreign Manpower Act 1990 (up to S$20,000 or two years’ jail), and a kickback offence under section 22A (up to S$30,000 or two years’ jail).

An EP salary kickback rarely looks like a bribe. It looks like a monthly cash “refund” handed back in an envelope, a “training fee” deducted from every payslip, a housing allowance quietly reclaimed, or a salary paid in full and then transferred back from the employee’s account a day later. On 16 October 2026 the Ministry of Manpower (MOM) reported that two people who ran an Ayurvedic centre had been found guilty of paying two Employment Pass (EP) holders between S$800 and S$2,300 a month against declared salaries of S$5,100 and S$7,350. This guide covers the offences, the statutory presumption, a payroll self-audit and the pass holder’s options.

This article is general information only and is not legal, tax or immigration advice. For matters needing legal advice, we work with a panel of experienced Singapore law firms.

What counts as an EP salary kickback?

Any arrangement where the EP holder ends up keeping less than the fixed monthly salary declared to MOM because money flows back to the employer, a director or someone acting for them. The label on the payment does not matter; what matters is that the declared salary is not the salary the employee really keeps.

MOM’s FAQ on what a fixed monthly salary is defines it as basic monthly salary plus fixed monthly allowances. Basic salary is payment that does not vary from month to month, regardless of performance or leave. That is the figure an employer types into the EP application, and it is the figure MOM expects the employee to receive. Kickback schemes usually take one of these forms:

Practice	How it is dressed up	Why it is a problem
Cash refund	Part of the salary withdrawn and handed back each month	Receipt as a condition of continued employment (s 22A); declared salary not really paid (s 22(1)(d))
Bank transfer back	Full salary credited, then sent to the company, a director or a relative	Payroll looks correct, but the employee keeps less than declared
Training or placement fee	A fixed monthly deduction called a course fee, bond or recruitment cost	Not a permitted item under s 22A(3), so presumed to be consideration for employment
Allowance swap	A “fixed” allowance declared to lift the salary, then never paid or reclaimed	The declared fixed monthly salary was never real
Security deposit	A sum paid “to guarantee” the employee will not resign early	Section 22A(1)(c) covers a financial guarantee related to employment

The site’s earlier guide on an overstated salary on an EP application deals with honest classification errors, where a variable allowance was counted as fixed. A kickback is different: the salary was declared correctly on paper and then clawed back in practice.

Which EFMA offences does a salary kickback trigger?

Usually two. The false declaration offence looks at what was told to MOM; the kickback offence looks at what was taken from the employee. Prosecutors can rely on either or both, and a director can be charged alongside the company.

Provision (EFMA)	What it covers	Maximum penalty on conviction
Section 22(1)(d)	Any statement or information given to the Controller, in an application, a renewal or for any other purpose under the Act, that the person knows or ought reasonably to know is false or misleading in a material particular	Fine up to S$20,000, jail up to 2 years, or both
Section 22A(1) and (2)	Deducting from salary, or demanding or receiving, directly or indirectly and in Singapore or elsewhere, any sum or benefit from a foreign employee as consideration or a condition for employment or continued employment, or as a financial guarantee	Fine up to S$30,000, jail up to 2 years, or both
Section 22(2)	An employer, foreign employee or agent who knows or has reason to believe a s 22(1)(d) offence was committed and intentionally omits to tell the Controller	Fine up to S$10,000, jail up to 12 months, or both
Section 20	Officer of a company (director, manager, secretary and similar) where the company’s offence was committed with their consent or connivance or is attributable to their neglect	Same as the company’s offence
Section 23	Anyone who abets an offence under the Act	Same as the offence abetted

Two features catch employers out. Section 22(1)(d) uses an “ought reasonably to know” test, so a director who signs a renewal without checking that the declared salary is really paid is not safe because someone else ran payroll. And section 20(5) presumes neglect by the officer primarily responsible who failed to supervise, until the contrary is proved. Our sister site’s overview of EFMA penalties, banning periods and work pass suspension sets out the wider penalty picture, and the full text is on Singapore Statutes Online under the Employment of Foreign Manpower Act 1990.

What do MOM’s recent cases show?

They show that MOM compares what was declared with what the employee actually received, and that the gap does not need to be subtle to be prosecuted. Three published cases illustrate the pattern.

• 16 October 2026: MOM’s release MOM Takes Firm Enforcement Action Against False Declarations in Work Pass Applications reported that two individuals who operated an Ayurvedic centre were found guilty of paying two EP holders between S$800 and S$2,300 a month, against declared monthly salaries of S$5,100 and S$7,350. They were to be sentenced at a later date.
• 14 January 2019: MOM reported that a food and beverage company was convicted on 27 December 2018 of seven EFMA charges, with 13 more taken into consideration, and fined S$94,500. It had declared salaries of S$4,000 to S$4,800 for 20 foreign employees who were paid S$1,500 to S$2,200, and MOM barred it from hiring foreign employees.
• 2 November 2026: MOM said it was investigating around 45 companies in Changi Airport operations, where preliminary investigations suggested the salaries and occupations declared for some EP holders were false. These are investigations, not findings.

The same October release also reported charges over CPF paid to local “phantom workers” to inflate quota; that side is covered in our post on how MOM detects phantom workers. This article stays with the salary side.

Is every deduction from an EP holder’s pay a kickback?

No, but the burden shifts to the employer. Section 22A(3) presumes that any deduction or receipt from a foreign employee was taken as consideration for employment, until the contrary is proved, unless it falls within one of five categories.

The permitted categories in section 22A(3) are:

• fees, costs, levies, penalties or charges that the employer is liable to pay under section 25(6), in whole or in part, as provided there;
• a fee or deduction prescribed as recoverable from the foreign employee under section 25(6)(a);
• where sections 26 to 32 of the Employment Act 1968 apply to the employee, a deduction authorised under those sections;
• where those sections do not apply, a deduction made in accordance with the terms of the employment; and
• a fee that a licensed employment agency may lawfully charge the foreign employee under the Employment Agencies Act 1958.

In practice, an employer should be able to point to a specific legal basis for every deduction on an EP holder’s payslip. Our guide can your employer deduct salary in Singapore? explains the general deduction rules for employees, and Raffles Corporate Services covers the employer side in salary deductions in Singapore.

Note too that a “fixed” allowance that is routinely reclaimed was never fixed in MOM’s sense, so the declared figure was wrong from the start.

How should an employer self-audit EP payroll against the declared salary?

Reconcile three records for every pass holder: the salary declared to MOM, the payslip, and the money that actually left and stayed out of the company’s hands. Where the three agree month after month, the kickback risk is low.

1. Pull the latest declared fixed monthly salary for each EP and S Pass holder from the application or renewal record.
2. Compare it with the basic salary and fixed allowances on each payslip for the last 12 months. Any month where a fixed item was reduced, skipped or reclaimed is an exception.
3. Match payslips to bank credits into the employee’s own account, not to a joint account, a director’s account or cash.
4. Search the company’s bank statements, petty cash records and directors’ accounts for receipts from pass holders or their relatives. Any recurring inflow needs an explanation.
5. List every deduction on the payslips and record its legal basis under section 22A(3). Remove anything that has none.
6. Have a director who did not prepare the payroll sign off the reconciliation before the next renewal is filed.

A wider checklist for fixed allowances, CPF and IR8A consistency is in our post on how MOM audits fixed monthly salary.

If money is coming back from a pass holder, stop the arrangement and take advice before the next filing to MOM. Repeating the declared salary at renewal while the clawback continues adds a fresh false statement, and section 22(2) penalises intentionally withholding a known false declaration from the Controller, so quietly unwinding the scheme is not a safe answer.

What can an EP holder do if asked to pay part of the salary back?

Refuse, keep evidence and report it. Section 22A targets the person who takes the money, but an employee who knowingly helps disguise the arrangement risks being treated as an abettor under section 23.

• Keep every payslip, bank statement, message and note showing the declared salary, what was credited and what was returned.
• Do not sign documents describing a refund as a loan repayment, a fee or a voluntary donation if that is not what it is.
• Report the matter to MOM through its “Report an Infringement” eService. MOM says information provided is kept strictly confidential.
• Where salary has not been paid, a salary claim may be possible. Our guide to Employment Claims Tribunal salary claims covers time limits and fees.

What should an employer fix before the next EP renewal?

Bring the declared salary and the real salary back into line, on the record, before MOM sees the next figure. There are only two honest ways to do that.

Either pay the declared salary in full, with no clawback, from now on, or, if the business cannot afford it, ask MOM about a lower salary in advance and check whether the employee still qualifies. Our guide on reducing an EP holder’s salary sets out the request, the re-qualification test and the risk to family passes. What is not an option is to keep declaring the old figure while taking part of it back.

Fix the paperwork too: offer letters that separate basic salary, fixed allowances and variable pay, a written rule that no employee pays money to the company or its officers, and a payroll control that flags any deduction without a section 22A(3) basis.

Frequently asked questions

Is it a kickback if the EP holder offers to return part of the salary voluntarily?

The employee’s consent does not take the payment outside section 22A. Any sum received from a foreign employee outside the permitted categories is presumed to be consideration for employment until the contrary is proved, and the declared salary is still not the salary really paid.

Does section 22A apply if the money is paid back overseas?

Yes. Section 22A(1) covers sums deducted, demanded or received directly or indirectly, and whether in Singapore or elsewhere, so a transfer to an account abroad or a payment to a relative is still caught.

Can a director be prosecuted personally for the company’s kickback scheme?

Yes. Under section 20 of the EFMA an officer is guilty of the company’s offence if it was committed with their consent or connivance or is attributable to their neglect, and section 20(5) presumes neglect for the officer primarily responsible who failed to supervise.

What is the maximum fine for a false salary declaration?

Under section 22(1)(d) read with section 22(1)(i), up to S$20,000, jail of up to 2 years, or both, per offence. MOM’s 2019 release on salary false declarations described the fine as up to S$20,000 per charge.

Need help with this? Call, SMS or WhatsApp +65 8501 7133, or email [email protected]. Little Big Employment Agency (EA Licence 19C9790) works with a panel of corporate and employment law firms; this article is general information, not legal advice.

Last reviewed: 6 November 2026. The Editorial Team, Little Big Employment Agency.