An employer is allowed to deduct money from an employee’s pay only if:
- The employee agrees in writing and it is principally for their benefit;
- The deduction is allowed by law, a court order or the Fair Work Commission; or
- The deduction is allowed under the employee’s award or registered agreement
- The deduction benefits the employer directly or indirectly and is unreasonable in the circumstances; or
- The employee is under 18 years of age and their parent or guardian has not agreed in writing.
Instead, the employer and employee should discuss and agree on a repayment arrangement.
If the employee agrees to repay the money, a written agreement must be made and specify:
- The reason for the overpayment;
- The amount of money overpaid;
- How repayments will be made by the employee; and
- The frequency of repayments.
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