Deductions from pay

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EmployerEmployee / worker

The information on this page applies only to employers and employees in the WA state industrial relations system. The state system covers businesses which operate as sole traders, unincorporated partnerships, unincorporated trust arrangements as well as any incorporated associations or not for profit bodies that are not trading or financial corporations. The Guide to who is in the WA State System has more detail.

This information does not apply to any business which operates as a Pty Ltd business and is a trading or financial corporation nor to any incorporated association or not for profit body that is a trading or financial corporation. These businesses and organisations are in the national fair work system and should visit the Fair Work Ombudsman website for information on employment laws. 

An employer may only deduct from an employee’s pay:

  • an amount the employer is authorised, in writing, by the employee to deduct and pay on behalf of the employee
  • an amount the employer is authorised to deduct and pay on behalf of the employee under the relevant WA award
  • an amount the employer is authorised or required to deduct by law or a court order.

It is unlawful to deduct money from an employee's pay if the deduction is not authorised.

If an employee is overpaid, it is not lawful for the employer to automatically take it out of their pay the next week. It is best for the employer to discuss this with the employee to see if an agreement can be reached about how to recover the overpaid amount. Unless the employee has given written authorisation, or the deduction is authorised by an award, agreement or court order, it is unlawful for the employer to make deductions.

An employer cannot deduct money from an employee’s pay to cover a financial loss or a breakage in the workplace unless the employee agrees in writing, or the deduction is authorised by the relevant WA award. An example of an unauthorised deduction would be taking money from an employee's pay the week following a breakage they accidentally made after tripping over at work.

Deductions requested by the employee 

Deductions from an employee’s pay can be made if an employee gives written authority for such deductions to be made and monies paid to another party on their behalf. Some common examples include social or sports club membership, private health fund, and employee superannuation contributions. An employee can withdraw their authorisation at any time by giving written notice. An employer is not obliged to make deductions requested by an employee.

Record keeping

All state system employers are legally required to keep employment records that detail time worked, leave taken and pay received by employees.

Learn more on the record keeping requirements page

 

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