Payment & deduction of wages for non-award employees

The Industrial Relations Act 1999 (PDF, 1.9MB) prescribes a number of rules about how wages are to be paid to employees.

Payment without deductions

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.

The Act gives the right to an employer to make deductions from an employees wages only where the employee has been paid an amount to which they are not entitled because of absence from work (e.g. an overpayment resulting from leave taken when no entitlement exists).

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.

The Act does not limit the employer's right to commence legal proceedings where they believe they have a legal right to recover any amounts from an employee.

Paying wages

The requirements for payment of wages in the Act include the following:

wages must be paid at least monthly. Once the pay period has been set it is good business practice to consult with employees before changes are made to those arrangements.
wages must be paid in Australian currency, or by one of the following methods but only with the employee's written consent:
- into an account nominated by the employee, or
- by cheque, draft, money order or electronic fund transfer.
if wages are paid in cash the payment may be rounded off to the nearest multiple of 5c.
wages paid other than in cash are to be paid without any deduction for charges because of the way payment is made (e.g. no deductions for bank fees or payroll processing charges).
cheques must be payable to a bearer on demand and must not be crossed except with the employee's written consent (i.e. the cheque must be easily negotiable).
employees must be paid all wages within 3 days of termination.

Last updated: 11 June 2008

Employment conditions

Payment & deduction of wages for non-award employees

Payment without deductions

Paying wages