Quick answer

Yes. In the private sector, an employer may generally withhold the portion of salary corresponding to an employee’s actual, unpaid absence under the principle of “no work, no pay.” This is usually not an unlawful deduction from wages already earned; it is nonpayment for time not worked.

But an employer cannot:

Treat approved paid leave as unpaid;
Deduct more than the salary attributable to the absence;
Use an unexplained or inconsistent payroll formula;
Impose an additional monetary penalty merely because the employee was absent;
Deduct unrelated losses, cash shortages, bonds, uniforms, or other charges unless the deduction is specifically lawful; or
Deny pay when the employee was ready and willing to work but the employer unlawfully prevented the employee from working.

Whether a particular deduction is lawful depends on the employee’s pay arrangement, attendance records, leave balance, employment contract, collective bargaining agreement, company policy, and the reason for the absence.

The general rule: no work, no pay

Philippine labor law generally recognizes that wages are compensation for work performed. If an employee voluntarily does not work and the absence is not covered by paid leave, the employer ordinarily does not have to pay for the missed working time.

The Supreme Court has explained that the “no work, no pay” principle contemplates a situation in which employees voluntarily absent themselves. The rule does not automatically apply when an employee was able, willing, and ready to work but was illegally locked out, dismissed, suspended, or otherwise prevented from working by the employer. See Milan v. National Labor Relations Commission, G.R. No. 202961, February 4, 2015.

This distinction matters:

Unpaid absence: The employer does not pay the wage corresponding to time not worked.
Deduction from earned wages: The employer subtracts money from compensation the employee has already earned.

The first may be lawful under “no work, no pay.” The second is tightly restricted by Article 113 of the Labor Code.

When salary may usually be reduced

A proportionate reduction is generally permissible when all of the following apply:

The employee was scheduled to work;
The employee did not work for all or part of the scheduled period;
The absence was not covered by an available and properly availed paid leave;
No law, contract, collective bargaining agreement, or established company benefit requires payment; and
The payroll computation accurately reflects only the unpaid time.

Common examples include:

An unapproved personal absence;
Approved leave without pay;
Sick leave after paid sick-leave credits have been exhausted, if no more favorable policy applies;
Vacation leave after paid vacation-leave credits have been exhausted;
Unpaid undertime, subject to a correct time-based computation; and
Additional unpaid leave expressly allowed by law, such as the optional 30-day extension after maternity leave.

An employer may also address repeated or unauthorized absences through its attendance and disciplinary rules. Any disciplinary action must still comply with the Labor Code, the company’s lawful rules, and applicable due-process requirements. A proportionate loss of pay for time not worked is different from imposing an arbitrary fine.

When the employer should not deduct salary

The absence is covered by paid leave

An employer should not classify an absence as unpaid when the employee validly used a paid leave benefit and complied with the applicable notice and documentation requirements.

Paid leave may arise from law, an employment contract, a collective bargaining agreement, or company policy. Important statutory examples include:

Service incentive leave: Generally five days with pay each year after at least one year of service, subject to the exclusions and exceptions in Article 95 of the Labor Code. Unused statutory service incentive leave is generally convertible to cash. See the Labor Code and the DOLE Workers’ Statutory Monetary Benefits Handbook.
Maternity leave: Generally 105 days with full pay for childbirth, with an additional 15 days for a qualified solo mother; 60 days with full pay for miscarriage or emergency termination of pregnancy; and an optional additional 30 days without pay. Qualification, notice, SSS contribution, allocation, and reimbursement rules may affect how the benefit is processed. See Republic Act No. 11210.
Paternity leave: Seven days with full pay for a qualified married male employee for the first four deliveries of the legitimate spouse with whom he is cohabiting, subject to notice and the law’s other conditions. See Republic Act No. 8187.
Solo-parent leave: Up to seven working days with pay each year for a qualified solo-parent employee who has rendered at least six months of service, regardless of employment status. A valid Solo Parent Identification Card is required under the implementing rules. See Republic Act No. 11861 and its implementing rules.

Other laws provide paid leave in specific circumstances, including leave for qualified victims of violence against women and their children and special leave for qualified women following surgery caused by gynecological disorders.

Vacation leave and ordinary sick leave are not universally required in the same form for every private-sector employee. They may instead come from a contract, collective bargaining agreement, company policy, or an employer’s leave program that already satisfies the service-incentive-leave requirement.

The employer caused the employee’s inability to work

“No work, no pay” is not a blanket defense when the employee reported for work or was demonstrably ready and willing to work but the employer unlawfully refused to admit, schedule, reinstate, or allow the employee to work.

The legal remedy may depend on what occurred. An illegal dismissal, illegal suspension, unlawful lockout, or improper floating-status arrangement raises issues beyond a simple absence deduction and may support a claim for back wages or other relief.

The deduction is really an extra penalty

An employer should not both withhold the proper pay for an unpaid absence and impose an additional salary forfeiture without a separate lawful basis.

For example, if an employee misses one unpaid working day, withholding an amount equivalent to several days merely as punishment is not automatically valid because the company calls it an “absence deduction.” The additional amount is a deduction from wages and must independently comply with the law.

Article 113 limits deductions from earned wages

Article 113 of the Labor Code generally prohibits employers from making deductions from employees’ wages except:

For an insurance premium paid by the employer where the employee consented to the insurance and the deduction reimburses that premium;
For union dues where the right to check-off is recognized or the employee has given the required written authorization; or
When the deduction is authorized by law or by regulations issued by the Secretary of Labor and Employment.

Other statutes authorize deductions such as withholding tax and lawful employee contributions to SSS, PhilHealth, and Pag-IBIG.

The Supreme Court has repeatedly treated unilateral deductions strictly. In Niña Jewelry Manufacturing of Metal Arts, Inc. v. Montecillo, G.R. No. 188169, November 28, 2011, the Court rejected salary deductions for cash bonds because the employer failed to establish that they fell within the statutory exceptions. In Aeroplus Multi-Sales, Inc. v. Martinez, G.R. No. 248304, April 20, 2022, it likewise ruled that a unilateral monthly cash-bond deduction was illegal.

Written employee consent does not automatically validate every deduction. The deduction must still be for a lawful purpose and comply with the Labor Code and implementing rules.

How an absence deduction should be computed

There is no single divisor that can safely be applied to every employee. The correct computation depends on the wage arrangement and the compensable days included in the stated salary.

Daily-paid employees

For a full unpaid working-day absence, the usual result is that the employee does not receive the daily wage for that day.

For a partial-day absence or undertime, the unpaid amount should ordinarily correspond only to the unpaid working time. The employer should use the employee’s applicable daily or hourly rate and exclude noncompensable meal periods where appropriate.

Monthly-paid employees

A monthly salary does not necessarily make every absence paid. An employer may still make a proportionate adjustment for an unpaid absence, but the computation must use the proper daily equivalent or payroll divisor for that employee’s arrangement.

The divisor may depend on whether the monthly salary is intended to cover:

Working days only;
Rest days and holidays as well as working days;
A five-day or six-day workweek; or
Another contractually defined number of paid days.

Before accepting the computation, ask the employer to identify:

The monthly basic salary used;
The divisor and why it applies;
The number of absent hours or days;
Whether the affected day was a working day, rest day, special day, or regular holiday;
Whether paid leave credits were applied; and
Any separate deductions included in the same payroll entry.

A payroll label such as “absence” does not establish that the amount is correct.

Example

Suppose an employee’s properly determined daily equivalent is ₱800 and the employee incurs one full day of approved leave without pay. Withholding ₱800 may be proper.

If payroll withholds ₱1,600, the employee should request an explanation. The second ₱800 could be an error, an unsupported penalty, or an adjustment involving another day. Its legality cannot be assumed without the payroll records and governing policy.

Absence before or after a holiday

Absence around a holiday requires special attention. It does not automatically permit the employer to deduct pay for every adjoining day.

Under the regular-holiday rules summarized in the DOLE handbook, an employee generally qualifies for regular-holiday pay if the employee worked or was on paid leave on the workday immediately preceding the holiday. An employee who was on leave without pay on that preceding workday may lose entitlement to holiday pay if the employee did not work on the regular holiday.

If the day immediately before the holiday was itself a nonworking day or the employee’s scheduled rest day, qualification is generally assessed by looking at the last working day before the holiday.

Special nonworking days follow a different general rule: “no work, no pay” ordinarily applies unless a favorable company policy, practice, collective bargaining agreement, or specific issuance provides otherwise.

Because holiday proclamations and pay rules can vary, verify the applicable proclamation and current DOLE holiday-pay advisory for the specific date.

Approved absence does not always mean paid absence

Approval and payment are separate questions.

An employer may approve time away from work but classify it as leave without pay because:

The employee has no remaining paid-leave credits;
The particular leave is unpaid by law or policy;
The employee requested unpaid leave;
Required documents were not submitted; or
The employee did not satisfy the conditions for the paid benefit.

Conversely, an employer should not deny pay merely by changing the label to “leave without pay” when the employee actually qualifies for and properly availed of paid leave.

Employees should obtain written confirmation showing whether approved leave is paid, charged to a particular leave balance, or unpaid.

Effect on holiday pay and 13th-month pay

An unpaid absence may have consequences beyond the immediate payroll period.

Regular-holiday pay: An unpaid absence on the relevant preceding working day may affect entitlement, as explained above.
Thirteenth-month pay: The statutory minimum is generally one-twelfth of the total basic salary actually earned during the calendar year. Because no basic salary is earned for a valid unpaid absence, that absence may reduce the statutory computation.
Leave balances: A valid paid absence should be charged against the appropriate leave balance rather than treated simultaneously as unpaid.
Benefits based on actual basic salary earned: The effect depends on the governing law, plan, contract, or company policy.

The employer should not reduce an earned benefit twice for the same absence or use a computation that conflicts with a more favorable contractual or established benefit.

What employees should do if a deduction appears wrong

1. Check the payroll entry promptly

Compare the payslip with:

Your work schedule;
Time records;
Approved leave dates;
Remaining leave credits;
The employment contract;
The employee handbook;
Any collective bargaining agreement; and
Earlier payslips showing how similar absences were handled.

Ask whether the entry represents unpaid time, a leave-credit adjustment, or a separate deduction.

2. Request the computation in writing

Send HR or payroll a short written request identifying:

The payroll period;
The disputed amount;
The dates or hours involved;
The leave application or attendance record supporting your position; and
Your request for the divisor, daily or hourly rate, and legal or policy basis.

Keep the message factual. A written inquiry creates a useful record and often allows payroll errors to be corrected internally.

3. Use the company grievance process

If the explanation is incomplete, elevate the matter to HR, the payroll manager, your supervisor, or the grievance mechanism stated in the handbook or collective bargaining agreement.

If a union represents you, consult a union officer. A dispute arising from the interpretation or implementation of a collective bargaining agreement may follow the grievance and voluntary-arbitration process rather than the ordinary route for an individual money claim.

4. File a Request for Assistance under SEnA

If the dispute remains unresolved, an employee may file a Request for Assistance under the Department of Labor and Employment’s Single Entry Approach, or SEnA. Requests may be filed through the DOLE Assistance for Request Management System or at participating DOLE, National Conciliation and Mediation Board, and National Labor Relations Commission offices.

SEnA is a conciliation-mediation process intended to help the parties reach a settlement before the dispute proceeds to formal adjudication.

5. Consider a formal money claim

If conciliation fails, the proper formal forum depends on the parties, amount, existence of a dismissal claim, collective bargaining coverage, and other facts. A Labor Arbiter generally handles many private-sector wage claims, while some limited claims may fall within DOLE regional-office authority. Collective bargaining disputes may belong before a voluntary arbitrator.

Article 306 of the Labor Code generally requires employment-related money claims to be filed within three years from the time the cause of action accrued. Do not wait until records, witnesses, or filing rights are lost. See Villafuerte v. Court of Appeals, G.R. Nos. 240202–03, June 27, 2022.

Evidence to preserve

Keep copies of:

Payslips before and after the deduction;
Payroll computations and salary-rate notices;
Daily time records, biometrics logs, schedules, and attendance reports;
Leave applications and approval messages;
Medical certificates and other supporting documents;
Screenshots of HR-system leave balances;
Employment contracts and amendments;
Employee handbooks and attendance policies;
Collective bargaining agreements;
Emails, text messages, and chat records with supervisors or HR;
Bank statements showing actual salary deposits;
Notices of suspension, return-to-work instructions, or denied access; and
Your written objection and the employer’s response.

Preserve original electronic files where possible, including dates and message headers. Do not alter attendance records or create documents after the fact.

Common mistakes

Assuming every monthly-paid employee must receive the full monthly salary

Monthly payment is a method of compensation. It does not necessarily convert unauthorized or unpaid absences into paid time. The correct question is what days the monthly salary covers and whether the payroll divisor is proper.

Assuming every approved leave is paid

A leave request can be approved as leave without pay. Confirm the leave classification and the balance that will be used.

Treating all deductions as lawful because the employee signed a contract

A contract cannot automatically override statutory wage protections. Broad clauses authorizing “any company deduction” should not be treated as unlimited consent.

Confusing an absence adjustment with a fine

Withholding the wage for actual unpaid time may be proper. Taking additional earned salary as punishment requires an independent lawful basis.

Ignoring rest days and holidays in the computation

The employee’s workweek and the type of day involved can materially change the result. A one-day absence does not automatically authorize deductions for an adjoining rest day or special day.

Relying only on verbal complaints

Report the issue in writing and retain proof of submission. Oral discussions are difficult to establish later.

Waiting beyond the filing period

Internal discussions do not necessarily protect a claim indefinitely. The general three-year period for money claims should be treated seriously.

When legal help is urgent

Seek assistance promptly if:

A large part of your salary has been withheld;
The employer refuses to provide payslips, attendance records, or a computation;
The deduction is recurring across several payroll periods;
The employer deducted pay for maternity leave or another protected statutory leave;
You were willing to work but were locked out, placed on an extended suspension, or removed from the schedule;
You were threatened, demoted, or dismissed after questioning the deduction;
The employer altered or asked you to falsify attendance records;
The dispute also involves minimum-wage underpayment, illegal dismissal, discrimination, or retaliation;
Several employees are affected by the same practice; or
The three-year period for a money claim may be approaching.

Frequently asked questions

Can my employer deduct one day’s salary for one day of absence?

Usually yes, if it was a scheduled working day, the absence was unpaid, and the amount accurately represents one day under the correct payroll formula.

Can the employer deduct two or three days for a one-day absence?

Not merely as punishment. The employer must explain any additional amount and show that it relates to other genuinely unpaid time or a separate deduction authorized by law.

Can salary be deducted for an approved absence?

Yes, if the leave was approved as leave without pay. No, if the absence was validly covered by paid leave and all applicable conditions were met.

Can salary be deducted when I submitted a medical certificate?

A medical certificate supports the reason for the absence but does not, by itself, create paid sick leave. Payment depends on statutory benefits, available leave credits, the employment contract, collective bargaining agreement, and company policy.

Can an employer deduct pay for tardiness or undertime?

The employer may generally withhold the amount corresponding to actual unpaid working time, using a correct and proportionate computation. It should not impose an arbitrary additional fine disguised as an attendance deduction.

Does absence on Friday allow a deduction for Saturday and Sunday?

Not automatically. The answer depends on whether Saturday and Sunday are working days, rest days, or days already included in the monthly salary. Government personnel are also subject to separate civil-service rules. The employer should identify the contractual and payroll basis for each day deducted.

Can the employer deduct pay for a regular holiday because I was absent the day before?

Possibly. An unpaid absence on the workday immediately preceding a regular holiday may affect holiday-pay entitlement if the employee does not work on the holiday. Paid leave and intervening rest-day rules can produce a different result.

Who must prove that salary was correctly paid?

In a wage dispute, employers ordinarily carry the burden of proving payment because payrolls, personnel records, and similar documents are generally under their custody and control. Employees should nevertheless preserve their own payslips, attendance records, and correspondence. See Kar Asia, Inc. v. Corona, G.R. No. 223314, July 15, 2020.

Where can I ask for government assistance?

You may approach the nearest DOLE regional or provincial office or file a SEnA Request for Assistance through DOLE ARMS. The appropriate next forum will depend on the nature and amount of the claim and whether dismissal or a collective bargaining dispute is involved.

Official references

This article provides general legal information, not legal advice. Employment contracts, workplace policies, collective bargaining agreements, payroll arrangements, and the facts surrounding an absence may change the result. For advice on a particular deduction, consult DOLE, a union representative, or a Philippine labor lawyer. Law and official procedures checked as of July 27, 2026.