Deductions from wages
Deductions from wages

The following Employment guidance note provides comprehensive and up to date legal information covering:

  • Deductions from wages
  • The worker's rights
  • When deductions are lawful
  • Definition of wages
  • Determining the amount of the deduction
  • Determining what is 'properly payable': the level of certainty required for a statutory claim
  • Determining what is 'properly payable': applying contract law
  • Deductions for tax and national insurance contributions (NICs)
  • Bonuses
  • Definition of 'worker'
  • more

UPDATE: In its ‘Good Work Plan’ published in December 2018 the government indicated that it will legislate to ban employers from making deductions from staff tips (ie discretionary payments for service). For further information, see our report: 17 December 2018.

The right to be paid wages in full is one of the most basic, and oldest, employment rights. A failure to pay will generally give a worker the right to bring a claim for unlawful deduction from wages. In a small number of cases, however, an employer is permitted to make a deduction.

The worker's rights

An employer may not make a deduction from the wages of any worker employed by the employer, or receive a payment from such a worker, unless:

  1. it is required or authorised to be made by virtue of any statutory provision or any relevant provision of the worker's contract, or

  2. the worker has previously signified in writing their agreement or consent to the making of it

For further information, see: When deductions are lawful below.

For further information:

  1. on the meaning of 'wages' see: Definition of wages below

  2. on the definition of 'worker' for these purposes, see: Definition of 'worker' below

  3. on the circumstances in which deductions are permitted, see: Excepted deductions and payments below

  4. on the