Deductions FAQs

What is a deduction?

A deduction is an itemised amount subtracted from your pay.

What deductions can an employer make?

Deductions are unlawful unless allowed by:

  • the authority of any Law, Regulation or other Enactment containing such a requirement e.g. deduction of an employee's Social Security Contributions
  • a judgement or order of the Royal Court or Petty Debts Court
  • the permission of the employee

Can an employer deduct till shortages from wages?

It is sensible for any such provision to be specifically referred to in the terms of employment as this will prevent disputes arising should an employer require to make such a deduction. Without such a provision, employees may take a complaint about pay deductions to the Tribunal.

(In the UK, workers in retail employment i.e. broadly those selling or supplying goods or services, have a special protection against deduction because of cash shortages or stock deficiencies. Sums owed to the employer may only be recovered by instalments limited to 10 per cent of the gross wages on each pay day. Any deduction because of a shortage is unlawful if made more than 12 months after the shortage was established. The 10 per cent limit does not apply to the employee's final pay day. Similar provisions to this within the terms of employment would be regarded as good practice, in that an employee who is subject to such a deduction would not be left without adequate funds to meet their essential commitments).

Aug 2019

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