Deductions from pay

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EmployerEmployee / worker

wa_image_small.jpg This information is only relevant to employers and employees in the WA state industrial relations system – sole traders, unincorporated partnerships, unincorporated trusts and some incorporated or not for profit organisations.  Find out more on the Guide to who is in the WA state system page.

If you operate or are employed by a Pty Ltd business – you can find information on this topic on the Fair Work Ombudsman website.

State employment laws are changing early in 2022

Learn more at Upcoming changes to state employment laws in Western Australia.

An employer may only make a deduction from an employee’s pay if:

  • the employee has agreed to the deduction in writing (as part of a written employment contract or otherwise) and the deduction is paid on behalf of the employee;
  • the employer is authorised by the WA award to make the deduction and the deduction is paid on behalf of the employee;
  • the employer is required by a court or a state or federal law to make the deduction (e.g. tax that must be withheld from the employee's pay).

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 next pay. It is best for the employer to discuss the matter 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 or agreement, it is unlawful for the employer to make deductions in this situation.

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 or agreement. 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 premiums, and voluntary 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.


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