Source data
GOV.UK wage deduction and minimum wage guidance for Great Britain
Sources checked
- 01Check the authority
Look for an allowed basis, such as a legal requirement, contract term or written agreement. Source 1
- 02Check minimum wage
Apply the minimum wage calculation rules for the deduction. Source 2
- 03Check retail shortfalls
A 10% gross pay cap per pay period applies to covered retail shortfalls. Source 1
- 04Check final pay
GOV.UK lists a separate final-pay exception for the retail shortfall cap. Source 1
A deduction’s purpose affects the checks that apply.
GOV.UK wage deduction and minimum wage guidance for Great Britain
These rules concern deductions from pay in Great Britain. A deduction must have an allowed basis. The minimum wage calculation and the retail shortfall cap are additional checks.
| Source | |||
|---|---|---|---|
| Income tax or National Insurance | Can be deducted as required or allowed by law | Legal authority for the deduction | Source 1 |
| Deduction agreed with worker | Written agreement or relevant contract provision can be a basis | Check applicable minimum wage rules too | Source 1 |
| Earlier overpayment | Recovery is listed as an allowed ground | GOV.UK also lists accidental wage overpayment among minimum wage exceptions | Source 1 |
| Mandatory work clothing bought by worker | The expense reduces pay for minimum wage calculation | Employer requires the clothing for the job | Source 2 |
| Retail cash or stock shortfall | Up to 10% of gross pay per pay period | Applies to a permitted retail shortfall deduction | Source 1 |
| Final pay for a departing worker | Full outstanding retail shortfall may be deducted | GOV.UK’s exception to the per-period cap | Source 1 |