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Section : What deductions may be made from an employee's pay?
Domain : Human Resource Management
Classification : Not Identified
Text Content
Taking money out of an employee's pay before it's paid to them is called a deduction. An employer can only deduct money if the deduction is reasonable and if:
- the employee agrees in writing and it's mainly for the employee's benefit
- it's allowed by a law, a court order, or by a Fair Work Commission order
- it's allowed under the employee's award, or
- it's allowed under the employee's registered agreement and the employee agrees to it. An employee can make a one-off written authorisation that gives their employer permission to deduct money from their pay, even where the amount can change from year to year. An employee's written agreement to a deduction must be genuine and can be withdrawn in writing at any time. An employee can't be forced to agree to a deduction. Examples of permitted deductions include:
- salary sacrifice arrangements
- voluntary contributions into an employee's super fund. Find more information about deductions at fairwork.gov.au/deductions