Updated for general guidance as of 2025. This is information, not legal advice.

The Core Rule

Under Philippine wage-protection laws, an employer may not make deductions from an employee’s wages unless the deduction fits one of the narrow, legally recognized bases:

Authorized by law (e.g., taxes; government-mandated contributions; lawful orders of competent authorities);
Authorized by a collective bargaining agreement (CBA) or arbitration award; or
Expressly authorized in writing by the employee for a payment to a third person, provided the employer receives no direct or indirect financial benefit from the deduction.

A calamity loan (e.g., SSS, Pag-IBIG/HDMF, or employer-sponsored) from a previous employer does not automatically fall into (1) or (2). That means a new employer cannot lawfully deduct installments from your current wages unless you give a new, specific, written authorization that complies with the law’s conditions—or a competent authority requires it.

Why a New Employer Can’t Simply Deduct

1) No automatic transfer of payroll authority

Salary-deduction authorizations given to a former employer (or embedded in prior company policies) do not bind a new employer. Consent for wage deductions is interpreted strictly; it must be clear, current, and specific as to:

the creditor (e.g., SSS, Pag-IBIG, bank, or the previous employer),
the purpose (repayment of calamity loan),
the amount or schedule, and
the fact that the employer gets no benefit from the arrangement.

2) Civil Code protection against garnishment

As a baseline, laborers’ wages are protected against attachment or garnishment, except for limited necessities (e.g., debts for food, shelter, clothing, medical attendance). A calamity loan to a government fund or private lender usually does not fall under those exceptions. Without your consent or a lawful order, the new employer has no authority to garnish your wages for a prior loan.

3) Government-mandated contributions vs. loans

Employers must deduct and remit mandatory contributions (SSS, PhilHealth, Pag-IBIG) and taxes. But loan amortizations (even SSS or Pag-IBIG salary/calamity loans) are not mandatory for a new employer unless:

you re-authorize payroll deduction in favor of the new employer (e.g., a new SSS or Pag-IBIG Salary Deduction Authorization), or
the agency issues a lawful directive that specifically obliges the employer to deduct (rare for a new employer absent your written consent).

Special Situations

A. SSS or Pag-IBIG (HDMF) Calamity Loans

During your stint with the former employer, they may have deducted amortizations under your signed authorization.
When you transfer, the loan remains your personal obligation. You typically shift to direct payment or execute a new salary-deduction authorization with your new employer.
No new authorization, no deduction. If the new employer deducts anyway, that’s generally an unauthorized wage deduction.

B. Employer-Granted Calamity Loans (Private employer as lender)

If the previous employer lent you money (not SSS/HDMF), your new employer has no privity of contract with that creditor. The new employer cannot deduct for the old employer’s benefit without your fresh, written authorization. Any inter-employer arrangement to “forward” deductions needs your clear consent and must not benefit the new employer.

C. Court or Agency Orders

Judgments, writs, or lawful orders can compel employers to withhold or remit portions of wages. But as noted, wage garnishment is tightly limited, and agencies/courts typically will not garnish wages for ordinary loan obligations absent specific statutory authority or your consent.

What a Valid Deduction Looks Like (Checklist)

For a new employer to deduct an old calamity-loan installment lawfully, all of the following should be true:

✅ Written authorization signed by you, naming the creditor (e.g., SSS/Pag-IBIG/Bank/Former Employer).
✅ Specific terms: amount or formula, frequency (per payroll), and duration or outstanding balance.
✅ No employer benefit: the current employer must not earn a fee, rebate, discount, or any advantage from the deduction.
✅ Revocability: your authorization should state how you can revoke it (usually prospectively, without affecting amounts already deducted and remitted).
✅ Transparency: the deduction must appear clearly on payslips with identifiable creditor and amount.
✅ Data privacy compliance: sharing your loan details across employers requires your consent or a lawful basis.

Red flags: A “blanket” authorization, unsigned forms carried over from a previous employer, or any arrangement where the employer receives a kickback.

Common Misconceptions

“The loan is government-sponsored, so deductions are automatic.” Not for a new employer. Government-mandated contributions are automatic; loan amortizations are not, unless you authorize them again.
“My take-home pay just needs to be above minimum wage, so they can deduct anything.” Minimum wage rules govern the rate for hours worked. Deductions must still be lawful. An unlawful deduction is invalid even if your net pay remains above minimum wage.
“My prior payroll authorization carries over.” It generally does not. Authorizations are typically employer-specific. Execute a new one if you want payroll deduction to continue.

Practical Paths for Employees

Direct payment to the creditor. Contact SSS/Pag-IBIG or the private lender and shift to over-the-counter/online remittances.
Issue a new salary-deduction authorization (optional). If you prefer payroll deduction, sign a fresh authorization with the new employer using the official form (e.g., SSS/Pag-IBIG) or a lender-provided template that meets the legal checklist above.
Audit your payslips. Look for any loan-related line item you did not authorize in writing. If present, promptly object in writing and request a refund and cessation.
Escalate if needed. If the employer refuses to correct, you may file a wage-related complaint with the appropriate labor authorities. Keep copies of payslips, emails, and your employment and loan documents.

Practical Paths for Employers

Adopt a strict “no authorization, no deduction” policy. Require a fresh, signed authorization for any third-party loan deductions. Keep it on file.
Use official agency forms when available. For SSS and Pag-IBIG loans, prefer agency-prescribed authorizations.
Zero benefit rule. Do not accept rebates, referral fees, or any consideration connected to employee loans.
Clear payslip disclosures. Identify creditor and amount per pay period. Provide balances when feasible (or direct employees to the creditor’s portal).
Data privacy. Share or process loan information only with consent or a valid legal basis.

Sample Language (Employee Authorization)

“I, [Name], authorize [Current Employer] to deduct from my wages the amount of ₱[amount] per [pay period] starting [date], representing amortizations on my [SSS / Pag-IBIG / bank / former-employer] calamity loan, Account/Reference No. [number], and to remit the same to [Creditor] until the total amount of ₱[outstanding balance] plus authorized charges is fully paid or until I revoke this authorization in writing. I acknowledge that [Current Employer] derives no benefit from this arrangement. I understand I may revoke this authorization prospectively by written notice.”

(Tailor for variable rates if the agency sets changing amortizations.)

Quick FAQ

Can my new employer deduct my old calamity loan without my consent? No. Not unless mandated by law, by a valid order, or by a new written authorization from you.

What if I previously signed an authorization with my old employer? You’ll likely need to sign again with your new employer (or pay directly).

What if they already deducted without my consent? Write HR to object and request a refund and cessation. If unresolved, consider lodging a wage complaint with labor authorities.

Will refusing payroll deduction put me in default? No—if you keep paying directly to the creditor in accordance with your loan terms. Coordinate promptly to avoid penalties.

Bottom Line

A current employer in the Philippines may not lawfully deduct amortizations for a previous employer’s calamity loan from your paycheck without a fresh, specific, written authorization from you, or a lawful mandate that fits the narrow statutory exceptions. The safest, most compliant route is either direct payment to the creditor or a new, well-drafted salary-deduction authorization that meets the no-employer-benefit and clear-consent requirements.