Your employer can only make a deduction from your pay if:
If you agree to the deduction, your agreement must specify the amount that will be deducted and any changes in the amount deducted must be authorised by you in writing.
You can withdraw your authorisation at any time in writing.
Your employer cannot directly or indirectly request you to spend or pay your wages if the requirement is unreasonable and if the payment will directly or indirectly benefit the employer or anyone related to them.
If you are applying for a new job, there are also rules about when a potential employer can request you to pay money to them. Your new employer cannot require you to pay them if:
Your award, enterprise agreement or contract may have a clause that permits a deduction or payment to be made, however, if you are under 18, these terms will have no effect unless the deduction or payment is agreed to in writing by your parent or guardian.
Some modern awards permit your employer to withhold a certain amount of your pay if you haven’t given the required amount of notice. For more information about notice and how much notice you need to provide, you can visit our ending employment page.
Some awards say that an employer can deduct wages if:
In these circumstances, generally the employer can only deduct an amount that is no more than one week’s wages.
Employers can only make deductions from wages owed under the award. They cannot deduct from other entitlements owed to you, such as annual leave or other payments under the award.
To check if you are covered by a modern award, you can visit the Fair Work Ombudsman page here.
If you have been overpaid by mistake, for example, due to an accounting error you will generally need to pay back the overpayment. If you can’t pay the amount back straight away, you could ask your employer if you can pay the overpayment back in instalments. It’s a good idea to record any agreement that you reach with your employer in writing, for example, in an email.
There are limited circumstances where an employer can deduct your pay, even if your employment contract says otherwise. We recommend that you contact us for free and confidential advice to check if the deduction or payment is permitted.
If you have a problem or a question, you can send it to us today and we can provide you with free advice, information and referrals to help solve your problem. Just click on the button below.
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