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Your pay

Payment of wages: When and how

Your employer must pay you on your agreed pay day – which means the day of the week and the pay period (for example, fortnightly) that you agreed to when you started work. Your employer can’t change your normal pay day without your agreement.

Your wages must be paid in cash unless:

  • Wages Protection Act 1983, ss 7-10

    you’ve agreed in writing to another form of payment, or

  • you’re absent from work when wages are paid, or
  • you’re employed by a local council or the government, or
  • your employment agreement specifies another form of payment.

Your employer must pay you the entire amount of your wages without making deductions, subject to certain exceptions (see “When can my employer dock my pay?” below).

When can my employer dock my pay?

Wages Protection Act 1983, ss 5, 5A

Your employer can only make deductions from your wages in these limited situations:

  • if you’ve asked for or agreed to the deduction in writing, which could be through having a general deductions clause in your employment agreement (you can withdraw your request or consent later at any time by giving a written notice to your employer)
  • if the deduction is legally required – for example, child support payments or court fines
  • in some cases when you’ve been overpaid (see below, “What happens if I’m overpaid?”).

You might have a general “deductions clause” in your agreement – for example, one allowing your boss to dock your wages if you’ve damaged something at work, like plates if you work in a restaurant. But they have to consult with you beforehand every time they make a particular deduction under this clause. The deduction also can’t be unreasonable – for example, they can’t deduct money for loss or damage that was caused by someone else who you had no control over.

What happens if I’m overpaid?

Wages Protection Act 1983, s 6

Your employer doesn’t have a general right to make deductions from your wages to recover overpayments that were simply due to miscalculations or other mistakes.

The only situation in which your employer can recover an overpayment through making deductions is where:

  • you were paid the money for a period when you were either away from work without permission, or suspended, or on strike or locked out, and
  • because of your employer’s payment method, it wasn’t reasonably practical to avoid the overpayment (for example, there was an equipment failure).

Your employer must also give you proper notice that they intend to recover the overpayment.

Property Law Act 2007, s 74B

If your employer can’t legally recover an overpayment through deducting it from your wages, they can recover it in the same way as for other debts. However, you may not have to pay back an overpayment if the money was paid by mistake and you received it in good faith – that is, you believed you were genuinely entitled to it.

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