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Deductions

The law protects individuals from having unauthorised deductions made from their wages, including complete non-payment. This protection applies both to employees and to some other workers.

One of three conditions has to be met for an employer lawfully to make deductions from wages or receive payments from a worker. The deduction or payment must be:

  • required or authorised by legislation (for example, income tax or national insurance deductions); or
  • authorised by the worker's contract - provided the worker has been given a written copy of the relevant terms or a written explanation of them before it is made; or
  • consented to by the worker in writing before it is made.

Protections for individuals in retail work make it illegal for an employer to deduct more than ten per cent from the gross amount of any payment of wages (except the final payment on termination of employment) if the deduction is made because of cash shortages or stock deficiencies. Workers who believe they have suffered an unlawful deduction from wages can make a complaint to an Industrial Tribunal.

Employees

Pay deductions

Employers

Making deductions

See:
  • No.7 Deductions from wages by employers
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