Understanding your pay
5. Deductions from your pay
Your employer isn’t allowed to make deductions unless:
- it’s required or allowed by law, eg National Insurance, income tax or student loan repayments
- you agree in writing
- your contract says they can
- there’s a statutory payment due to a public authority
- you haven’t worked due to taking part in a strike or industrial action
- there’s been an earlier overpayment of wages or expenses
- it’s a result of a court order
A deduction can’t normally reduce your pay below the National Minimum Wage even if you agree to it, except if the deduction is for:
- tax or National Insurance
- something you’ve done and your contract says you’re liable for it, eg a shortfall in your till if you work in a shop
- repayment of a loan or advance of wages
- repayment of an accidental overpayment of wages
- buying shares or share options in the business
- accommodation provided by your employer
- your own use, eg union subscriptions or pension contributions
If you work in retail - eg shops, restaurants
Your employer can’t take more than 10% from your gross pay (pay before tax and National Insurance) each pay period to cover any shortfalls.
There’s a shortfall of £50 in your till and your employer wants to deduct this from your earnings.
You’re paid £250 gross per week. Your employer can take 10% of your gross earnings, which is £25.
They must only take £25 one week and then make another deduction from your next pay cheque for £25.
If you leave your job, they can take the full amount owed from your final pay
If you haven’t been paid in full
Speak to your employer first to try to sort out the problem informally.
If this doesn’t work, talk to Acas (Advisory, Conciliation and Arbitration Service), Citizens Advice or your trade union representative.
You have the right to go to an Employment Tribunal to get your money.
If you leave your job
Check your contract to see if your employer is allowed to withhold your pay. Normally you’re entitled to be paid everything you’ve earned up to the point you finish.
If you’re forced to resign because your employer refuses to pay you, you may be able to make a constructive dismissal claim in an Employment Tribunal.