What counts as "wages" for a deductions claim?

Section 27 ERA defines wages broadly — basic pay, overtime, bonuses, commission, holiday pay, statutory sick pay, maternity pay, and other contractual payments. It does not include expenses, redundancy pay, or genuine loans. Tips and gratuities became wages in October 2024 under the Employment (Allocation of Tips) Act 2023.

When CAN an employer make a deduction?

Only in three situations — (a) when required or authorised by statute (e.g. PAYE, National Insurance), (b) when authorised by a relevant provision of the contract that the worker has agreed to in writing in advance, or (c) when the worker has separately agreed in writing in advance to the specific deduction. Verbal agreement is not enough.

Is there a deadline to bring a claim?

Three months less one day from the last in a series of deductions, or three months less one day from the single deduction. ACAS Early Conciliation pauses the clock. The "series" rule was narrowed by the Court of Appeal in Bear Scotland and tightened further by the Supreme Court in Agnew (2023) — disputes about how far back a series can extend are common.

What about unpaid commission or bonuses?

Commission and contractual bonus payments count as wages if the right to be paid them has crystallised — i.e. you've earned them under the contract. Discretionary bonuses are harder; the employer's discretion has to be exercised genuinely, not capriciously or in bad faith.

Can my employer deduct money for damage I caused?

Only with your written consent **given before the event** that triggered the deduction. A blanket "we may deduct for damage" clause in your contract is enforceable. A retrospective deduction after the damage is not, unless you sign a fresh written agreement.

Wages & Unlawful Deductions

Most "unpaid wages" claims in the UK aren't about minimum wage breaches — they're about unauthorised deductions. Part II of the Employment Rights Act 1996 makes it unlawful for an employer to deduct anything from your wages unless the deduction is required by law, you've genuinely agreed to it in advance in writing, or it falls within a narrow list of exceptions. Employment tribunals hear thousands of these cases every year.

Cases on file

1087

Claimant win rate

55%

Cases reaching a determination

Median damages awarded

£8,275

Where compensation was awarded

How claims actually progress

Many unfair dismissal claims never reach a hearing on the merits — they're struck out, out of time, or fall outside the tribunal's jurisdiction. This is independent of why the dismissal happened.

Reached the merits

859

79% of all

Tribunal decided whether the dismissal was fair.

Struck out

7% of all

Claim ended early — usually for non-attendance, non-compliance, or no reasonable prospect.

Out of time

7% of all

Claim filed after the 3-month limit and not extended.

No jurisdiction (status / service / coverage)

7% of all

Claimant lacked two years’ service, the right employment status, or the tribunal had no power to hear it.

Withdrawn or settled

0% of all

Claim resolved without a hearing.

Where the law sits

Part II of the Employment Rights Act 1996 (sections 13–27) is the statutory home of unlawful-deduction claims. The Employment Tribunal has jurisdiction over deductions from wages but not over broader unpaid wages where the dispute is purely contractual and exceeds £25,000 — those go to the civil courts.

What the tribunal actually decides

A typical claim turns on three questions:

Was the payment "wages" under s.27? Bonuses are the usual battleground. Pure discretionary bonuses without a contractual entitlement often fall outside the definition.
Was there a deduction? "Deduction" includes shortfalls — non-payment of wages properly due is a deduction. Mistakes count.
Was the deduction authorised? Statute, contract (with written agreement in advance), or separate written consent in advance. No retrospective authorisation.

If the answers are yes, yes, no — the worker wins.

Common factual patterns

Commission disputes — particularly in sales roles, where the trigger for commission is contested.
"Repayment of training costs" — recoverable only with a clear repayment clause signed before the training.
Final-salary disputes — accrued holiday, unpaid notice, withheld bonuses at termination.
Tip allocation — newly in scope since October 2024.
Statutory sick pay shortfalls — rare but always recoverable.
National Minimum Wage cases — separate enforcement regime but the underlying claim is also an unlawful deduction.

The two-year backstop

A claim can recover wages going back two years from the date the claim form is lodged (or, if longer, the date of presentation of the ET1). This is the cap introduced by the Deduction from Wages (Limitation) Regulations 2014. The Supreme Court's decision in Agnew (2023) clarified how the "series of deductions" rule interacts with this backstop.

Why these claims matter strategically

Wages claims are the single most common tribunal claim type. Employers often underestimate them because individual amounts can be modest — but they aggregate fast in multi-claimant cases (holiday pay, commission, tips) and they don't require two years' service or any complex statutory test.

Cases on Wages & deductions

Showing the 20 most recent of 1087 cases

Case

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Frequently asked

What counts as "wages" for a deductions claim?: Section 27 ERA defines wages broadly — basic pay, overtime, bonuses, commission, holiday pay, statutory sick pay, maternity pay, and other contractual payments. It does not include expenses, redundancy pay, or genuine loans. Tips and gratuities became wages in October 2024 under the Employment (Allocation of Tips) Act 2023.
When CAN an employer make a deduction?: Only in three situations — (a) when required or authorised by statute (e.g. PAYE, National Insurance), (b) when authorised by a relevant provision of the contract that the worker has agreed to in writing in advance, or (c) when the worker has separately agreed in writing in advance to the specific deduction. Verbal agreement is not enough.
Is there a deadline to bring a claim?: Three months less one day from the last in a series of deductions, or three months less one day from the single deduction. ACAS Early Conciliation pauses the clock. The "series" rule was narrowed by the Court of Appeal in Bear Scotland and tightened further by the Supreme Court in Agnew (2023) — disputes about how far back a series can extend are common.
What about unpaid commission or bonuses?: Commission and contractual bonus payments count as wages if the right to be paid them has crystallised — i.e. you've earned them under the contract. Discretionary bonuses are harder; the employer's discretion has to be exercised genuinely, not capriciously or in bad faith.
Can my employer deduct money for damage I caused?: Only with your written consent **given before the event** that triggered the deduction. A blanket "we may deduct for damage" clause in your contract is enforceable. A retrospective deduction after the damage is not, unless you sign a fresh written agreement.