Unauthorised deductions from wages : calculate what you are owed

• Under section 13 of the Employment Rights Act 1996, a deduction from wages is only lawful if it is required or authorised by statute, authorised by a relevant provision of your written contract that you were notified of, or you agreed in writing to the deduction beforehand.
• Common flashpoints include uniforms, till or stock shortages, training clawbacks, and tools. A casual chat is not the same as prior written agreement.
• In retail, deductions for shortfalls are generally capped at 10% of gross pay per pay period (final pay can be treated differently when you leave).
• Deductions must not normally take you below National Minimum Wage, with limited exceptions listed by GOV.UK and Acas (tax/NI, certain contractual liabilities, loan or overpayment recovery, accommodation offset, and similar).
• Raise the issue with your employer, then Acas early conciliation if needed. Most pay claims still have a 3 months minus 1 day tribunal time limit; from 1 October 2026 that becomes 6 months minus 1 day if the clock starts on or after that date.

Section 13 of the Employment Rights Act 1996 (see also Part II) protects workers against unlawful deductions from wages.

In plain terms, your employer may only deduct if one of these applies:

1. Required or authorised by law : for example income tax, National Insurance, or student loan deductions handled through PAYE, or deductions a court has ordered.
2. Authorised by a relevant provision of your contract : a clear written term that allows that type of deduction, and you were notified of that term before the deduction.
3. You agreed in writing before the deduction was made : for example a signed agreement for a union subscription or to repay a specific training cost.

GOV.UK’s deductions from your pay page also lists situations such as:

• statutory payments due to a public authority
• unpaid strike or industrial action
• earlier overpayment of wages or expenses
• court-ordered debt payments from wages

Acas covers the same ground in Making and checking deductions, including salary sacrifice (needs agreement; must not take cash pay below National Minimum Wage) and clear payslip entries.

If none of those routes applies, taking the money is likely an unauthorised deduction. A surprise line on a payslip does not make it lawful.

These situations come up often. The question is not only whether something went wrong at work. It is whether the deduction was required by law, set out in a notified contract term, or agreed by you in writing in advance.

Uniforms and appearance kit Charging for a branded shirt or a "deposit" without a clear contractual right or prior written agreement is a classic dispute. Even if uniforms are mentioned, check whether the wording authorises a wage deduction and whether you were told about it beforehand.

Till shortages and stock losses Retail and hospitality often try to recover till differences from whoever was on the till. That is only lawful if the contract or a prior written agreement allows it, and retail percentage limits may apply (see below). Blame without written authority does not create a right to deduct.

Training clawbacks Employers sometimes reclaim course fees if you leave within a set period. Acas says training cost deductions need to be in the contract or agreed in writing beforehand. Mandatory training that makes you pay to do the job can also raise National Minimum Wage issues if it pushes pay below the legal rate.

Tools, equipment, and "damage" Deductions for broken or missing kit need the same lawful basis. A verbal warning is not automatic written authority for a payroll deduction.

Vague "other" lines If you cannot tell what a deduction is for, ask for a written explanation and the contractual or statutory basis. Payslips should make deductions clear.

If you work in retail (GOV.UK gives shops and restaurants as examples), special limits apply to deductions for till or stock shortfalls.

According to GOV.UK:

• Your employer cannot take more than 10% of your gross pay (pay before tax and National Insurance) in any one pay period to cover shortfalls.
• If the shortfall is larger, they must spread recovery across pay periods (subject to the 10% cap each time).
• If you leave, they may take the full remaining amount from your final pay.

Acas adds practical points: the contract still needs to allow the deduction; the employer should tell you in writing what you owe and how they will reclaim it before the next payday; and they should reclaim within 12 months of finding the shortage.

GOV.UK-style numbers: shortfall £50; weekly gross pay £250. Ten percent of £250 is £25. So the employer can take £25 that week and £25 from a later payslip, not the full £50 in one go (while you remain employed).

As a rule, a deduction must not push your pay below National Minimum Wage / National Living Wage, even if you "agree". From April 2026, workers aged 21 and over are entitled to £12.71 an hour (GOV.UK NMW rates).

GOV.UK and Acas list limited exceptions where a deduction can take pay below the minimum, including:

• tax or National Insurance
• something you have done that your contract says you are liable for (GOV.UK example: a till shortfall if you work in a shop; Acas example: damage through reckless driving where the contract creates liability)
• repayment of a loan or advance of wages
• repayment of an accidental overpayment of wages
• buying shares or share options in the business
• accommodation provided by your employer (subject to the official accommodation offset rules)
• certain payments for your own use that the employer does not benefit from, such as union subscriptions or pension contributions (with conditions)
• voluntary training costs you agreed in writing to repay (Acas)

Outside those exceptions, "you signed a form so we can take you below NMW" is not a free pass. Mandatory training costs that drag pay under the minimum are a particular warning sign flagged by Acas.

You work in a high-street shop. You are 24 and paid £12.71 an hour. In one week you work 30 hours.

Gross wages before any shortfall deduction:

30 × £12.71 = £381.30

On Friday the till is £40 down. Your manager says they will "take it from your wages". Your written contract does not mention till shortages. You never signed a separate written agreement allowing that deduction. There was no court order and no statutory requirement.

What should happen: without law, a notified contract term, or prior written agreement, the employer should not deduct the £40. Your gross for the week should remain £381.30 (before normal tax and NI).

What sometimes happens in practice: the payslip shows wages of £341.30 and a £40 "till" deduction. That £40 is the sum in dispute as an unauthorised deduction.

Even if your contract did authorise till recoveries, the retail rule would still limit how much could come out of this pay period: 10% of £381.30 gross is £38.13. So at most £38.13 could be taken this week toward a contractual shortfall, with any remainder later (and final-pay rules if you left). Contract authority and the 10% cap are separate checks: you need both where retail limits apply.

Keep the payslip, rota, and any messages about the till. Those documents matter if you escalate.

1. Check the paperwork. Contract, staff handbook terms you were given, any deduction agreement you signed, and the payslip wording.
2. Raise it informally first. Ask in writing what was deducted, why, and which legal or contractual power they rely on. Give them a chance to reverse a mistake.
3. Formal grievance if informal contact fails. Follow your workplace procedure if there is one.
4. Acas. Use Acas for advice and, if you intend to claim, start early conciliation. Notifying Acas in time can pause the tribunal limitation clock while conciliation runs.
5. Employment tribunal. Claims for unauthorised deductions are a standard route. Acas explains that for one wrong deduction you generally count 3 months minus 1 day from the deduction date; for a series, from the most recent, with rules about gaps and linked deductions and a possible look-back of up to two years in some series cases (Acas deductions guidance).

Dual time-limit regime (live as at 7 September 2026):

• For most claims, including many pay claims, the tribunal time limit remains 3 months minus 1 day.
• From 1 October 2026, the time limit for most claims becomes 6 months minus 1 day, but only if your time limit starts on or after 1 October 2026.

See Acas employment tribunal time limits. A grievance does not stop the clock on its own. Protect the deadline.

Citizens Advice or a trade union can also help you frame the complaint.

Ask yourself: Does a law require this deduction? Does a written contract term you were told about allow it? Did you agree in writing before the money was taken? If it is a retail shortfall, is it within 10% of gross for this period? After the deduction, are you still at or above National Minimum Wage unless an official exception applies? If the answers are shaky, treat the deduction as disputed money.

Unauthorised deduction claims turn on what you should have been paid for the hours you worked. Logging shifts against each payslip makes a surprise till or training line easier to spot. Paye Mes Heures helps you keep that working-time record so you can challenge underpayments with facts rather than memory.

• https://www.gov.uk/understanding-your-pay/deductions-from-your-pay
• https://www.legislation.gov.uk/ukpga/1996/18/part/II
• https://www.acas.org.uk/deductions-from-pay-and-wages
• https://www.legislation.gov.uk/ukpga/1996/18/section/13
• https://www.acas.org.uk/employment-tribunal-time-limits
• https://www.gov.uk/national-minimum-wage-rates