The 23 per cent reduction between September and December compares to £814,002 in the same period in 2018.
It is the third piece of good news in two days for the troubled operator Abellio, whose ten-year franchise is being terminated three years early in 2022 after a funding dispute.
Punctuality last month was the best in December for three years, while its passenger complaints rate was down by 6 per cent and is the lowest of any train firm operating in Scotland.
The penalties under the Service Quality Incentive Regime (Squire) have to be spent on improvements agreed between the train operator and the Scottish Government's Transport Scotland agency, which controls the franchise.
ScotRail attributed the improvement to better CCTV, station upkeep, passenger information and train cleanliness.
However, Scottish Labour highlighted that it failed to meet standards in 21 of the 38 categories, with failures including station toilets and lighting.
The party said Abellio had incurred penalties since it took over five years ago that had reached an "eye-watering" £14,384,453.
However, the figure includes RPI inflation, which is excluded from the official figures to enable like-for-like comparisons.
ScotRail said a closer working relationship with Network Rail, with which it forms "Scotland's Railway" contributed to a 20 percent point improvement in platform surfaces, from 59 per cent to 79 per cent up to standard.
The operator said train toilet availability had improved by 4 points thanks to new tanks at its Yoker depot in Glasgow so more could be serviced at the same time.
Customer service from ScotRail staff on trains and at stations improved by five points.
Scottish Labour transport spokesman Colin Smyth said: “Abellio’s tenure operating ScotRail has been a shambles from the day the SNP handed the Dutch firm the keys to Scotland’s railways.
"The SNP promised a world leading service but have delivered overcrowded, late or delayed trains with equally failing station services to match.
“Particularly shocking is ScotRail’s failure to meet performance targets on vital issues such as security and passenger safety."
ScotRail sustainability and safety assurance director David Lister said: “It’s great to see the hard work and effort of our people, to deliver the level of service our customers expect and deserve, continuing to pay off.
“The £475 million spent on new and upgraded trains, and continued investment in better stations and better facilities will ensure we continue to make improvements in the areas that matter most.”