Deductions From Wages 

This extract from HMRC is advice to employees…

“Rules for making deductions from your pay

Your employer is not allowed to make a deduction from your pay or wages unless:

  • it is required or allowed by law, for example National Insurance, income tax or student loan repayments
  • you agree in writing to a deduction
  • your contract of employment says they can
  • it is a result of any statutory disciplinary proceedings
  • there is a statutory payment due to a public authority
  • you have not worked due to taking part in a strike or industrial action
  • it is to recover an earlier overpayment of wages or expenses
  • it is a result of a court order or Employment Tribunal decision

 

You are allowed to put clauses into contracts of employment that will allow you to recover till shortfalls from your employees but there are again rules about how much and when you can make the deductions.

Retail work: extra protection from deductions

If you work in retail (such as a shop or restaurant or pub) you have extra protection against deductions from your wages. If there is a shortfall in the till or stock shortage, your employer is not allowed to take more than 10 per cent of your gross wages for a pay period. If the 10 per cent isn’t enough then your employer can continue to take money from your wages on subsequent paydays. However never more than 10 per cent at a time.

An example:

There is a shortfall of £50 in the till. Your employer wants to deduct this from your earnings. You are paid £250 per week before any deductions for tax or National Insurance etc (£250 gross pay).

Your employer can take ten per cent of your gross earnings. They must only take £25 one week and then make another deduction from your next pay cheque for £25.

If you leave your job, your employer can take the full amount owed from your final pay.”

Make sure you don’t fall foul of these rules as to do so can land you in an Employment Tribunal

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