Deductions from Wages and Salaries
Published in Labour Law · 5 July 2022
Do you know what the rules are about deductions from wages and salaries? Can deductions be made without consulting the employee?
In our previous article we explained the types of leave employees are entitled to as detailed in the Basic Conditions of Employment Act 75 of 1997 (BCEA). In this article we will discuss deductions from the wages of an employee in respect of the BCEA and Labour Law.
In principle deductions from salaries and wages are allowed under two circumstances;
1. You have agreed in writing that a deduction can be made, or
2. You are legally required to allow the deduction to be made.
The above two requirements seem simple and intuitive, but do we know all the legislation that applies to it and do we understand the agreements we create and sign. It is not reasonable for every employer and employee to understand all the legislation so one should try to seek assistance where there is any doubt regarding the topic of deductions.
The most common deduction that is required by law that employees should see on their payslips is UIF or Unemployment Insurance. This deduction is a legislative requirement. Employers and employees do not have a choice when it comes to legislative requirements.
Another common legally required deduction is TAX. The South African Revenue Services (SARS) does not give the employer a choice regarding paying the taxes of their employees so employees who earn above the minimum taxable income are required to surrender to Pay As You Earn (PAYE) deductions.
An interesting point concerning deductions is that the employer is legally entitled to deduct any overpayment from the salary of the employee. This means that if an employee receives, in error, a large bonus paid into his/her bank account it must be returned to the employer or it will be deducted from his/her next salary.
What happens when an employee has damaged some company equipment and the employer wants to make deductions from the employees’ salary for the damage?
In this situation the employer cannot deduct the money from the employee’s salary without fulfilling certain requirements first. Amongst these requirements is that the employee has agreed in writing to pay for any damage that is done and that a fair procedure is used to determine if the employee is at fault.
Other deductions include debt repayments, Bargaining Council levies, Trade Unions fees, court orders, garnishee orders, arbitration awards etc. Many types of deductions rely on written agreements that must be in place before processing the payroll. Claiming ignorance regarding deductions cannot prevent employers from incurring penalties. It is best to be aware and have a strategy to rectify the situation.
This article does not constitute legal advice and is based on the author’s interpretation of legislation and case law. Book a consult for legal advice or assistance pertaining to your specific matter.