Can I make a deduction from an employee’s pay for money they owe me?

Deductions from an employee’s pay can be made by employers under very specific circumstances only. The Wages Protection Act 1983 clearly outlines the limit on pay deductions, so that employees are protected.

Examples of lawful deductions include PAYE tax, student loan repayments and child support.

It is unlawful for an employer to make deductions from pay if:

  • it only benefits the employer
  • the deduction was done without written consent from the employee
  • the employee is under 18 and neither their parent or guardian has agreed to the deduction in writing
  • the circumstances were unreasonable – for example, the deduction was made because the cash register till was short or the employer felt it was justified due to poor performance