A punched slug removal system for punching a slug from a workpiece and removing the punched slug. The system includes a punch having a reciprocating travel path with a transition point where the punch changes direction. A die plate has an aperture into which a die bushing may be disposed. The die bushing provides support for the workpiece and has an opening through which the punch and a slug pass. A manifold supports the die plate and (if present) the die bushing and has a distribution channel and an orifice which direct a gas flow onto a slug attached to the punch in a direction perpendicular to the reciprocating travel path of the punch to remove the slug from the punch. The distribution channel is tapered to increase the velocity of the gas flow. The orifice is positioned at the top of the manifold adjacent the transition point of the reciprocating travel path of the punch. The manifold extends into the aperture of the die plate, reducing the cross sectional area of the aperture, and has a step formed under the punch. The system also includes a vacuum, offset relative to the punch and applied to the side of the punch opposite the orifice, to enhance removal of slugs from the punch.