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Payment & deduction of wages

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How must I pay my employees?

The requirements for payment of wages in the Industrial Relations Act 1999 (PDF, 1.9MB) include the following:

Should a cheque, draft or money order representing wages be dishonoured, the employee may recover in a court of competent jurisdiction (as a debt payable) the wages payable and a reasonable amount for damages suffered because of the dishonour.

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When are employees to be paid?

Industrial instruments (i.e. awards, agreements) usually specify how often an employer must pay wages. If the industrial instrument does not state that wages should be paid weekly or fortnightly, the Act requires wages to be paid at least monthly.

Wages are usually paid in arrears (i.e. after hours have been worked in the pay period), however, your industrial instrument may prescribe specific particulars for your industry or workplace.

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Can an employer deduct money from an employee's wages?

An employer must pay wages to their employees without deduction - except if those deductions are authorised by the employee in writing or if the deduction is authorised by the Act or by an industrial instrument (e.g. an award or agreement). These provisions apply both to rates of wages prescribed in an industrial instrument and to rates of wages agreed between the employer and employee.

Exceptions may apply to this rule, for example, where the deduction is authorised under other legislation or by an order of a court. The most common exception is deductions for the payment of tax or child support.

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Can an employer make deductions without the employee's consent?

The Act gives the right to an employer to make deductions from an employees wages where an employee has been paid an amount to which they are not entitled because of absence from work. The employer can commence deductions within 1 year of the date of overpayment with deductions extending up to 6 years after the overpayment. A deduction cannot be made that would reduce the amount received by the employee to less than three-quarters of the wages payable for each pay period.

Where an employee resigns without giving the required notice, employers are also given the right in the Act to make deductions, as authorised by the relevant industrial instrument, from any wages owing to the employee.

Where an employer believes an employee owes a non wages related amount of money to them as a civil debt, the Act does not limit the employer's right to commence a legal proceeding to recover the amount.

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What should employers do with unclaimed wages?

Sometimes employers do not know the location of former employees and are therefore unable to forward them the wages they are owed. In these cases, employers should after 30 days forward the former employee's wages to the nearest clerk of the Magistrate's Court.  If the money is not claimed after a further 30 days, the clerk of the court will forward it to the Department of Employment and Industrial Relations where the money will be held on behalf of the employee.

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How are wages to be paid and deducted for employees not covered by an award or agreement?

See non-award employees

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Last updated: 11 June 2008

See also ...

Wageline's fact sheet on:

General Industrial Relations Information on Employment: