What can legally be deducted from your salary?

A till comes up short. A company laptop is dropped. Somebody resigns without working notice. In each case an employer reaches for the obvious remedy, which is to take the money off the next payslip.

This guide is part of our Your rights at work: pay, contracts, resigning and retrenchment, which links every guide on the topic.

That remedy is regulated, and most of the time it is being used unlawfully. The rule is not that an employer may recover what is genuinely owed. The rule is that an employer may not deduct at all unless one of a short list of gateways applies.

The basic prohibition

Section 34(1) of the Basic Conditions of Employment Act 75 of 1997 provides that an employer may not make any deduction from an employee's remuneration unless:

• the employee has agreed in writing to the deduction in respect of a debt specified in the agreement, or
• the deduction is required or permitted in terms of a law, collective agreement, court order or arbitration award.

Note what that does not say. It does not say that an employer may deduct where the employee owes money. It does not say that a deduction is lawful if it is fair, or reasonable, or obviously due. The question is always whether there is written consent or a legal basis, and if there is neither, the deduction is unlawful however sound the underlying claim is. Our salary deduction checker walks you through those questions for a particular deduction.

The employer is not left without a remedy. It can sue, like anybody else who is owed money. What it may not do is help itself out of the payroll.

What is permitted without your consent

A good deal comes off a payslip lawfully and without anybody signing anything, because a law or an order requires it.

PAYE, deducted and paid over to SARS under the Income Tax Act.

UIF contributions, one per cent from the employee and one per cent from the employer, up to the contribution ceiling.

The skills development levy, which is the employer's own obligation rather than a deduction from you.

A garnishee order or emoluments attachment order, which is a court order directing the employer to pay part of your salary to a creditor. Our guide on emoluments attachment orders explains the limits, and our guide on garnishee orders granted without your knowledge deals with the ones that appear out of nowhere.

A maintenance order directing that maintenance be deducted from your earnings and paid to the beneficiary.

Pension, provident and medical scheme contributions, where these arise from the fund rules or a collective agreement that binds you.

Union subscriptions, where a collective agreement provides for them.

The common feature is an external legal instrument. The employer is executing somebody else's decision, not making its own.

Deductions for loss or damage

This is where most disputes arise and where employers most often get it wrong, because the section imposes four cumulative conditions and employers typically satisfy one.

Section 34(2) permits a deduction to reimburse an employer for loss or damage only if all of the following are true:

The loss or damage occurred in the course of employment and was due to the fault of the employee. Ordinary shrinkage, an unexplained shortfall, or a loss that cannot be attributed to a particular person does not qualify. Fault has to be established, not assumed from proximity.

The employer followed a fair procedure and gave the employee a reasonable opportunity to show why the deduction should not be made. This is a hearing, in substance. An employee must be told what is alleged, be given the case against them, and be allowed to answer it before any money is taken.

The total amount of the debt does not exceed the actual amount of the loss or damage. The deduction is compensatory. It is not a penalty, and it may not include something for inconvenience or as a deterrent.

The total deduction does not exceed one quarter of the employee's remuneration in money. Even a properly established debt is recovered in instalments capped at 25% of pay.

All four. An employer who is certain the employee broke the equipment, and who deducts the whole replacement cost from one month's salary without a hearing, has failed three of them.

The consent problem

Employers frequently rely on a clause in the employment contract signed on the first day, authorising deductions for any amount that may become owing. Whether that satisfies section 34 is genuinely contested, and the better view is that it often does not.

The section requires written agreement in respect of a debt specified in the agreement. A clause covering unspecified future debts, signed before any debt existed, at the moment of greatest inequality between the parties, sits awkwardly with that wording.

Practically, the safe course for an employer is to obtain consent at the time, for the specific amount, once the debt is known and the employee has had a chance to dispute it. Practically, for an employee, a blanket clause signed years ago is not the end of the argument.

Things that are commonly deducted unlawfully

Cash and till shortages. Extremely common in retail and hospitality, and almost never compliant, because there is no fault enquiry and no hearing. A shortfall in a till used by four people is not proof that any of them was negligent.

Stock losses. The same problem, usually worse, because the loss is attributed to a department rather than to a person.

Damage to a company vehicle. Often deducted in full and immediately. Fault may well be present, but the procedure and the 25% cap still apply, and the actual loss is the repair cost or the excess rather than an estimate.

Training and study costs on resignation. Recoverable only on a proper written agreement, and a repayment clause that operates as a penalty rather than a genuine recovery of costs is vulnerable.

Unreturned equipment. The employer may recover the value, subject to the same conditions. Withholding an entire final payment until a laptop is returned is not a deduction the section permits.

Notice not worked. Where somebody resigns and leaves immediately, employers routinely deduct the notice period from the final payment. That is a deduction and must satisfy section 34. It is also worth checking what the contract actually requires, which our guide on notice periods when you resign sets out.

Negative leave. An employee who has taken more leave than they accrued owes a genuine debt, but recovering it from the final payment is still a deduction.

What to do about an unlawful deduction

Ask, in writing, for the basis. Request the amount, what it is for, and whether it is said to rest on written consent or on a legal requirement. This single step resolves a surprising number of cases, because payroll errors are common and are usually corrected once identified.

Check the payslip. Section 33 requires an employer to give written particulars with each payment, including the amount and purpose of any deduction. A deduction that appears without explanation is a breach in itself, and our guide on what must be on a payslip lists the rest of what it must show. (An employer with fewer than five employees is exempt from section 33 under section 28(2)(a), but domestic and farm workers are entitled to pay statements under their sectoral determinations, and even an exempt employer must still have a lawful basis for every deduction under section 34.)

Do not sign a consent you disagree with. Consent given now legitimises what was previously unlawful, and employees are often asked to sign after the money has already been taken.

Refer it. There are three routes and the right one depends on your circumstances:

• A complaint to a labour inspector at the Department of Employment and Labour, who can investigate a contravention of the BCEA and issue a compliance order. This costs nothing, but a compliance order for money is not available if you earn above the BCEA earnings threshold.
• The CCMA, where you earn at or below the BCEA earnings threshold, which allows a referral under section 73A about a failure to pay an amount owing in terms of the Act, a contract of employment, a sectoral determination or a collective agreement. The threshold is set by the Minister and adjusted most years, and our guide on the BCEA earnings threshold gives the current figure. Our guide on what to do when your employer does not pay you compares the routes.
• The Labour Court, which has jurisdiction over BCEA claims generally, and which is where a higher-earning employee or a heavily contested claim is likely to end up.

There is commentary disputing how far the CCMA's jurisdiction over deductions specifically extends, so if the amount is significant it is worth taking advice on the forum before referring.

Mind the time. Do not let an unlawful deduction sit for years. Claims prescribe, and evidence about a till shortage three years ago is very hard to reconstruct.

If you are the employer

The instinct to recover a genuine loss is understandable, and the exposure created by recovering it the wrong way is disproportionate to the amount usually at stake.

Establish fault before anything else. Hold a proper enquiry and record it. Quantify the actual loss with documents rather than estimates. Get specific written consent for the specific amount. Then recover it in instalments within the 25% cap.

If any of those steps cannot be completed, the alternative is not to deduct anyway. It is to decide whether the amount justifies a civil claim, and in most cases it does not, which is precisely why employers take the shortcut.

Worked example

This example is illustrative. Thabo earns R12 000 a month. A company tablet issued to him is damaged, and the employer establishes after a proper enquiry that he dropped it through his own carelessness. The repair quote is R4 500.

The employer may recover R4 500, because that is the actual loss. It may not recover R6 000 on the basis that a new tablet costs that much, if the item can be repaired.

The cap is one quarter of R12 000, which is R3 000 a month. So the recovery runs over two months: R3 000 and then R1 500.

Before deducting anything, the employer needs Thabo's written agreement to the deduction of that specified debt, and it must already have given him the opportunity to say why the deduction should not be made, which the enquiry did.

Change the facts slightly and the analysis collapses. If the tablet was in a shared cupboard and nobody knows who damaged it, there is no fault and no deduction. If the employer simply took R4 500 off one payslip with no enquiry, it has breached the fair procedure requirement and the 25% cap in one move, and the whole amount is recoverable by Thabo even though he did in fact break the tablet.