What deductions from wages may be permitted by the contract of employment?

Examples might include deductions from pay for fines for traffic offences committed when driving company vehicles, or damage to machinery caused by worker negligence. 

The worker must agree in writing to the deduction before the events that give rise to the need to make the deduction take place. Usually this agreement is written into the contract of employment, by including wording that permits deductions from wages. The wording in the contract document must be clear. Without clear prior written permission for the deduction from your wages, it will be unlawful. 

The employer must give the worker a written copy of their agreement to any deduction. In the retail sector, there is additional protection. Retail sector employers cannot deduct more than 10% from an individual's gross pay from any one pay slip (other than the final pay slip). 

Note: This content is provided as general background information and should not be taken as legal advice or financial advice for your particular situation. Make sure to get individual advice on your case from your union, a source on our free help page or an independent financial advisor before taking any action.

What is WorkSmart?

A career coach that works for everyone.


Enjoy bite-sized activities delivered to you every week.

Lightbulb brain

Equip yourself with essential skills to be the best you yet.


Get the guidance you need to stay focused and reach your goals.

Worksmart circle