Law guide: Workplace

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Non-payment deductions and payslips

Non-payment deductions and payslips

The rights set out in this section apply to workers (individuals contracted to provide work or services on a full-time, part-time or fixed-term basis). This includes employees, but not self-employed staff. For more information, see Employees, workers and the self-employed.

You have a right to know the amount you are to be paid and how often. If your employer wants to make deductions from your pay, there are rules they must follow.

What can be deducted from your pay?

Your employer is not allowed to make 'unauthorised' deductions from your pay. However, there are several exceptions:

  • Your contract says they can - and your employer has given you a written copy of the part of the contract which says so, or a written explanation of it, before making the deduction
  • It is required or authorised by law, such as income tax, national insurance or student loan repayments
  • You have agreed in writing to a deduction before the conduct takes place for which your employer proposes to make a deduction
  • If you were overpaid on a previous occasion, then the rules against unauthorised deductions do not apply. Your employer will often be allowed to recover the overpayment. You should speak to a lawyer, an Acas or LRA (for Northern Ireland) advisor or a Citizens Advice Bureau advisor for more information about how and when you might be able to prevent your employer from taking back an overpayment.

Other situations where the rules against deductions don't apply include a situation where you took part in industrial action or where a deduction is made under a court order. Whatever the situation, your employer must still comply with the terms of your contract. Any claims related to deductions made in terms of the exceptions will have to be made in the county court, High Court, or (in Scotland) the sheriff court or Court of Session.

If you haven't been paid at all, the law considers your employer to have made an unlawful deduction equivalent to the value of the pay due to you, as opposed to not paying you at all. In other words, a legal fiction will apply which considers your pay to have been paid, but then deducted by your employer.

Retail work

If you do retail work (for example, if you work in a shop), you have extra protection. Your employer is not allowed to take more than 10 per cent of your gross wages from your take-home pay on any individual payday to make up the shortfall from a cash or stock shortage. If this isn't enough, your employer can continue to take money from your wages on subsequent paydays, but not more than 10 per cent on a single payday. If you leave the job, your employer can take the full amount owed.

You can complain to an employment tribunal (or industrial tribunal in Northern Ireland) if your employer does not follow these rules.

Should you be given a payslip?

By law, your employer must give you a written 'pay statement' - usually called a payslip - when or before you are paid your wages. It must include your gross pay, take-home pay and any deductions.

Deductions that change (for example, Income Tax payments) must be individually listed each time. Fixed deductions (for example, trade union subscriptions) can be shown as one combined total provided you have been given an annual statement showing how that total breaks down. The annual statement must set out the amount of each fixed deduction and the intervals at which the amount is paid.

Additional information might be included on your payslip, including your National Insurance Number, tax codes and hourly rate. Also, payments like overtime, tips, bonuses etc. might be shown separately. However, none of this information is required to be on your payslip.

If you haven't received a payslip, then you should start by following the steps set out in the article on resolving problems at work. If that doesn't help, then you can apply to an employment tribunal (or industrial tribunal in Northern Ireland).

When and how you should be paid

When you start work your employer should tell you:

  • The day/date on which you'll be paid - for example, each Friday, or the last working day of the month
  • The method of payment (in cash, by cheque or directly to your bank)

If you are an employee, you must be given a document which tells you how much you'll be paid, and at what intervals. In England, Wales and Scotland, your employer must give you this by the time you start working for them. In Northern Ireland, it must be given to you within 2 months of starting work.

What to do if you haven't been paid in full

If you haven't received your full pay (or any pay) try these simple steps:

  • Check your payslip to see if it tells you why you haven't been fully paid
  • Check your contract to see if there is anything that allows your employer to make deductions from your pay
  • Speak to your employer to see if you can sort the problem out with them
  • If you have an employee representative (for example, a trade union official) you can ask for their help.

If this doesn't work, you have the right to go to an employment tribunal (or industrial tribunal in Northern Ireland) to get your money unless your employer has made a deduction under one of the exceptions. You can also try and reclaim money you've lost (including the extra losses caused by you not receiving the money on time, for example, bank charges) by making a breach of contract claim.

Leaving your job

If you are forced to resign as a result of your employer refusing to pay you, you might be able to make a constructive dismissal claim.

If you leave a job and serve an agreed notice period, you're still entitled to be paid in full. This includes any additional payments, such as holiday pay, that are covered in your contract of employment.

If during the notice period you are on maternity, paternity, parental or adoption leave, off work through illness or on holiday, or you're ready and willing to work but your employer provides you with none, you may still be entitled to a minimum level of pay.

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