Wages

Information covers both the payment of wages, and what to do when there are changes to wages.  We also have a short video on what to include in payslips.

• Wages must be paid in legal money - not vouchers, coupons, or promissory notes.
• Employers can pay:
  • Directly into a bank account 
  • By cheque, postal order, or money order 
  • Into a third-party account, but only if the employee gives written and signed permission and the third party is not connected to the employer.

• In some industries, parts of wages may be paid as allowances in kind (e.g. meals, accommodation).
• These must be: 
  • Customary or necessary for the job
  • Fairly valued 
  • Suitable for personal use by the employee and/or their family

Employers must pay wages directly to the employee, unless:

• There is a legal requirement
• A collective agreement applies
• The employee has given specific permission

Employers cannot control how employees spend their wages.

Deductions can only be made if:

• The employee agreed to it in writing
• There is a court order
• It’s required by law (e.g. Social Security & Tax contributions)

• Employees must be paid at regular intervals, no more than once a month apart 
• Payment must be made on a normal working day

Employees must receive a written payslip on or before payday. It must include:

• Gross pay
• Deductions (with reasons) 
• Net pay
• How and where the payment was made (if split)

• If there is a dispute about an employee’s payslip, either the employee or the employer can refer it to the Tribunal - while still employed or within 7 weeks & 6 days of leaving.
• If unauthorised deductions were made in the last 13 weeks, the Tribunal can order an employer to repay them.
• If an employer fails to provide payslips, an employee can claim up to 8 weeks’ pay in compensation.

• Employers must provide a written statement Contract) of employment terms, including wage details.
• If the rate of pay changes, a written notification must be given to the employee (e.g., letter or email).
• There is no need to reissue the full terms of employment - just the change notice suffices.

• Employees must receive itemised payslips for each pay period.
• Employers should include a note in the relevant weekly/monthly payslip - ( in this example of Minimum Wage) stating that from 1 April 2025, the hourly wage increased to £13.00.

A sample letter is provided to notify employees of the change:

Date:

Dear [Employee],

Re: Changes to wages

This letter serves as an addendum to your terms of employment, advising that effective from 1 April 2025, in line with Minimum Wage, your hourly rate of pay will increase to £13.00.

Yours sincerely,