What deductions can my employer make from my pay?

Your employer is entitled to make deductions from wages for certain purposes and in certain circumstances. These fall into three main categories.

Deductions authorized by statute:

• Income tax and national insurance contributions
• Court or tribunal orders (although the latter must be agreed in advance in writing by the worker)

Deductions which can be permitted by the contract of employment:

Examples might include deductions to pay for fines for traffic offences committed when driving company vehicles, or damage to machinery caused by worker negligence. The circumstances in which deductions from wages are permitted must relate to matters arising after the worker has agreed to the deduction. Retrospective agreement would not make such deductions lawful. The employer must give the worker a written copy of that part of the contract of employment where the worker has agreed to such a deduction.

Sometimes employers will insist on written agreement before starting employment to deduct for loss of stock or money or breakages. Although this is permissible, the employer cannot deduct more than 10% of gross pay on any one day.

Deductions which can be covered by advance written agreement:

These include permission to deduct union subscriptions or payments to charity. The worker may withdraw his or her written agreement to such deductions.