This Frequently Asked Questions guide explains what to do if your employer makes a deduction from your wages that you have not agreed to.
A deduction from wages is money taken from your pay. It could be a few pounds or your entire pay for that period.
If the money would normally be part of your pay, and your employer takes it out, this counts as a deduction.
Your employer can take money from your pay if:
- The law says they must (for example, income tax or National Insurance)
- It is in your contract
- You agreed in writing before it was taken
- It is to fix a mistake where you were accidentally overpaid
Examples of permitted deductions are:
- Income tax, National Insurance, student loan deductions, court-ordered attachment of earnings
- Employee pension contributions that you’ve agreed to
- Trade Union subscriptions that you’ve agreed to
- Money deducted to correct an overpayment
- Charges for uniforms, training, background checks etc., if included in your contract of employment or you’ve provided written agreement in advance
- Docking for till shortages, breakages, lateness etc., if included in your contract of employment or you’ve provided written agreement in advance.
Examples of unauthorised deductions are:
- Your employer taking money from your pay without your permission, for things like till shortages or broken equipment
- Being charged for uniforms, training, or background checks without agreeing to it
- Having part of your pay kept as a ‘fine’ for being late or making mistakes, without your consent
If your employer claims a deduction is authorised by your contract, but you disagree, you should:
- Ask your employer to identify which part of your contract they are relying on.
- Check that the clause is clear and specific, and that it was agreed before the deduction was made.
- If the wording is unclear or if the deduction takes your pay below the National Minimum Wage, you may be able to challenge the deduction.
- You should contact your Trade Union, local Advice Agency or Law Centre NI for advice.
Generally, an employer is entitled to recover wage overpayments.
You may have a reason not to repay the money if:
-
the overpayment was more than six years ago, or
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you did not realise you were overpaid and spent the money in good faith.
Your employer should act reasonably in how it manages recovery of the overpayment. Your employer should agree a repayment plan with you and take into account any financial hardship that you may face after deducting wages.
Your employer usually cannot take money from your pay that brings it below the National Minimum Wage for the hours you have worked. There are some exceptions, though.
Deductions that reduce your pay to below the National Minimum Wage and may still be lawful include:
- Income tax and National Insurance contributions
- Student loan repayments
- Court-ordered deductions (for example, an attachment of earnings order)
- Repayment of a genuine loan or wage advance
- Recovery of an accidental overpayment of wages
- Contractual payments connected to misconduct
- Certain accommodation charges
Deductions that cannot reduce your pay to below the National Minimum Wage include:
- Charges for things you need to do the job, for example, uniforms, tools and equipment
- Mandatory training costs
- Other deductions which are made for your employer’s own use and benefit.
If you are unsure about whether a deduction is allowed, seek advice from your Trade Union, local Advice Agency or Law Centre NI.
If you work in retail, for example a shop, cafe, bar or restaurant, you have extra protection from deductions for till shortages or stock shortfalls.
Key points:
- Deductions must be authorised. This means there must be a clear term in your contract or a written agreement you signed beforehand.
- Maximum deduction: Your employer can take up to 10% of your gross pay (before tax and National Insurance) at a time.
- If you owe more than 10%: Your employer should spread the repayment over several pay periods, but still take no more than 10% each time.
- Written notice: Your employer must tell you in writing that you owe money and explain how it will be recovered.
- Time limit: The employer must recover the money within 12 months of discovering the shortage.
- Final pay exception: The 10% limit does not apply to your final pay—your employer can deduct the full amount then.
Steps to take if you think a deduction from your pay is unauthorised:
- Check your payslip and contract. Make sure the deduction isn’t for tax, National Insurance, or something you agreed to in writing.
- Raise it informally first. Talk to your line manager or HR department—it might just be a clerical mistake that can be fixed quickly.
- Put your complaint in writing. If the issue isn’t resolved informally.
- Send an email or letter to your employer. Include when the deduction was made, how much was taken, and why you think it was unauthorised. Provide a deadline for a reply; for example two weeks. (A template is provided at the end of this FAQ)
- Keep a copy of your email or letter
- Take legal action if needed. If your employer does not resolve the matter, you can:
- Make a claim to the Employment Tribunal for unauthorised deductions, or
- Use the Small Claims Court for breach of contract
- Be aware of the time limits for making a claim (explained below)
- If in doubt, get advice from your Trade Union, a local advice service, or Law Centre NI.
Employment Tribunal
You have three months minus one day from the date of the deduction—or the last deduction in a series—to submit a claim to the Employment Tribunal.
Before submitting, you must attempt or consider Early Conciliation with your employer.
To do this, contact the Labour Relations Agency within the three-month time limit. You can start Early Conciliation on their website: Early Conciliation | Labour Relations Agency – Official
While Early Conciliation is happening, the time limit is paused, however you should keep in mind that it resumes as soon as the certificate is issued. Therefore, you need to ensure you submit your claim quickly so it is within the deadline.
For detailed guidance, see Law Centre NI’s guide: Employment Tribunal Guide | Law Centre Northern Ireland.
Small Claims Court
You can make a breach of contract claim in the Small Claims Court within six years of the deduction.
For more information, see: Small Claims | Department of Justice
You should contact your Trade Union, Local Advice Agency or Law Centre NI for advice about unauthorised deductions of wages.
Dear Employer
Subject: Unauthorised deduction from wages
I am writing to you about a deduction from my wages for the period [pay period dates], paid on [pay date].
I spoke to my line manager about this on [insert] but they have been unable to resolve the matter.
My payslip for this pay period refers to a deduction of £[amount] for [description on payslip].
I believe this is an unauthorised deduction, as it is not referred to in my contract of employment and I have not given my written agreement to the deduction.
I should be grateful if you would confirm:
- The basis on which you have made this deduction (including any provision of my contract or other written agreement on which you rely), and
- How you have calculated the amount of the deduction.
If you are unable to show a lawful basis for the deduction, I will require immediate reimbursement of the amount and correction of any associated records, including my payslip.
I should be grateful to hear from you in writing within 14 days of the date of this letter.
Yours
[Your name]
[Job title / Employee ID]
