Underpayment of wages
Deductions from your pay
Your employer is not allowed to make a deduction from your pay or wages unless:
- it's required or allowed by law, such as National Insurance, income tax or student loan repayments
- you and your employer agree the deduction in writing
- the contract of employment states that they can do this
- there is a statutory payment due to a public authority
- you've not worked due to taking part in industrial action (see our strike hub for more information)
- it's the result of a court order or employment tribunal decision.
The Employment Rights Act 1996 affords protection against unlawful deductions from wages to employees, agency workers (but not self employed people) and apprentices. If the employer is attempting to deduct a previous overpayment, please see overpayment of wages.
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Step 1: Check and talk about it |
• check if it's a lawful deduction (see above) |
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Step 2: If unresolved, put it in writing |
Write to the employer/agency using our letter template (includes an example) and:
• always be polite, clear and firm |
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Step 3: If unresolved, write again |
If you do not receive a response to the first letter, write again using our letter template and: • amend the letter noting when you sent the first attempt and add that this is your second and final attempt |
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Step 4: Talk to us |
If you do not receive a response to the second attempt within the final 5 days, contact us. We will advise you what to do next. You may have grounds for a grievance or possibly an Employment Tribunal (ET) claim for unauthorised deductions from wages under Part II Employment Rights Act 1996 but strict time limits apply (3 months (less one day) from the date of the last underpayment). |
If you can't sort things out directly with your employer (either informally or formally via a grievance), it is important to contact us for advice. We will explore the options with you.
With our support, one option could be to bring an employment tribunal claim for unlawful deduction from your wages. To do this in England, Scotland and Wales, ACAS has to be notified and they will offer you the opportunity to use Early Conciliation. In Northern Ireland, you'll need to notify the Labour Relations Agency and follow a similar process.
A claim to an employment tribunal can be made within three months (less one day) of the underpayment. If there is more than one deduction from your wage over a period of time, you could potentially claim back pay for the earlier deductions. However there may be a two-year cap on the back pay you could claim, depending on the country in which you work. Be sure to gather as much evidence as you can about the underpayments that have been made to assist the tribunal with its decision.
If you miss the three month time limit and cannot make a claim to an employment tribunal, you can pursue your claim through the county court via a breach of contract claim. The limitation period is six years from the date of the breach. In Scotland, this should be done through the sheriff’s court within five years of the unlawful deduction.
Timing is very important. Make sure you are within the time limits for making a claim to the employment tribunal. Our employment tribunal guide has more information.
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Page last updated - 14/05/2024
