Legal deductions from pay

Overview of what can legally be deducted from an employees' pay as specified in the Employment Rights Act 1996.

The Employment Rights Act 1996 makes it an offence for employers to make any deduction from a worker's wage unless:

It is required or authorised under a statutory provision
It is authorised under a provision in the worker's contract
It has been agreed in advance in writing by the employee
It is a genuine over-payment of wages or expenses
There is a court order, for example, an attachment of earnings
It is payable to a third party because of a term in the contract or because the worker has given prior written consent
It is a statutory payment due to a public authority to satisfy any statutory disciplinary proceedings, or made for taking part in a strike or other industrial action.

If the deduction is made because of a term in the worker's contract, the worker must have been shown the term or notified in writing of its effect before the deduction is made.

Useful information:

Reviewed and updated by the HR Services Partnership – April 2010.

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