Know when an employer can deduct money from a worker.
On this page:
The rules about deductions
There are limited situations when an employer can take (that is, deduct) money from an employee’s pay or require them to spend or pay money.
An employer can only deduct money if:
- the employee agrees in writing, the amount of the deduction is set out and it’s principally for the employee’s benefit, or
- it’s allowed by a law, a court order, or by the Fair Work Commission, or
- it’s allowed under the employee’s award (for example the Horticulture Award or the Wine Industry Award, or
- it’s allowed under the employee’s registered agreement and the employee agrees to it.
Examples include salary sacrifice arrangements or additional payments into an employee’s super fund.
Deductions must be shown on an employee’s pay slip and a record of the deduction kept by the employer.
Employers can’t pay an employee the correct amount of pay but then make the employee give back some or all of the money. This is sometimes referred to as a ‘cashback scheme’. They also can’t unduly influence or pressure an employee to agree or not agree to deductions.
Employers also can’t unreasonably require employees to spend or pay their own money or their pay.
To find out all the rules about deductions from pay go to the Deducting pay page.
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Paying for accommodation & transport
Workers must be paid money for the work they do. They can’t be paid in goods or services, like transport or board.
Employees can decide to use employer-provided accommodation or transport. If the employer proposes to deduct money from an employee’s pay to cover these costs, the rules about deductions must be followed.
Example: Manuia’s rent is deducted from his pay
Manuia is in Australia and applies to work at an apple farm in Victoria.
The owner rents out rooms in a house on the farm to workers at market rates so he can make some extra money.
Manuia has a conversation with the owner and agrees to rent a room while he works at the apple farm. The agreement is not put in writing.
The owner tells Manuia he will deduct the rent from his wages.
This is unlawful. The owner cannot deduct money from Manuia's pay as there is no written agreement and it's not principally for Manuia's benefit. There is also no enterprise agreement which covers Manuia and allows deductions.
Manuia and the owner must make a separate agreement to pay rent.
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Employers can’t ask job applicants to pay money to receive a job offer.
Employers also can’t ask an employee to pay money to keep their job.
Example: Hannah looks for a job on the Harvest Trail
Hannah is looking for work along the Harvest Trail.
She finds an ad on the internet looking for workers to pick strawberries on a farm in New South Wales.
The ad lists only a business name, the person’s first name and a mobile number. There is also no Australian Business Number (ABN) or Australian Company Number (ACN).
Hannah contacts the person listed in the ad and says she wants to apply for the job. The person tells her she can have the job but she must pay a bond for her accommodation before she can start work.
Hannah is suspicious and tells the person she will think about the offer.
Hannah searches the name of the farm in the Australian Business Registerbut can’t find a business listing, ABN (Australian Business Number) or ACN (Australian Company Number) for it.
Hannah realises this was not a legitimate job offer and was likely a scam to get money.
For workers – when looking for work, here are some warning signs that things might not be right:
- job offers that require upfront fees or include ‘free’ accommodation
- ads that don’t list much business information, such as only a phone number or post office box
- jobs picking the wrong seasonal fruits or vegetables (for example, picking summer fruits in winter), and
- job offers that guarantee a quick visa or sponsored employment in Australia.
For more tips on looking for work, go to our Working the Harvest Trail page.
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A cashback scheme is when an employer pays an employee the correct pay rate but then makes the employee give back some of the money.
It looks like the employee has been paid correctly but because the employee had to give back some of the money they have been underpaid.
Cashback schemes are against the law.
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For workers: to ask for our help to sort out issues about deductions, cashback schemes or if an employer asks for money to receive a job offer, go to Getting help.
You can also send us an anonymous tip-off in English or in your language.
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