What do you call the payment made by an employer to an employee or worker?

An employee has the right to know how much they will be paid and how often. They are also entitled to receive an individual, detailed written pay statement from their employer, either when they are paid or shortly before.

When you start work your employer should tell you:

the day or date when you'll be paid - for example, each Friday, or the last working day of the month
how you will be paid, for example, in cash, by cheque or directly to your bank

If you are an employee, you must be given a document which tells you how much you will be paid, and at what intervals, within two months of starting work. This is normally contained in your contract of employment.

Understanding your work status
Employment contracts and conditions

Payslips

You don't have a right to receive a pay slip if you're:

not an employee, for example contractors, freelancers or 'workers'
a member of the police service
a merchant seaman, master or crew member working in share fishing and paid only by a share in the profits or gross earnings of a fishing vessel
Understanding your work status

What your payslip must contain

Every pay statement must contain the following information:

amount of your wages before any deductions (gross wages)
individual amount of any fixed deductions (such as trade union subscriptions) or the total amount of these deductions if you are given a 'standing statement of fixed deductions' as detailed below
individual amount of any variable deductions (for example, tax)
net amount of your wages (this is the total after deductions)
amount and method for any part-payment of wage (such as separate figures of a cash payment and the balance credited to a bank account)

Your employer might include additional information on your payslip which they are not required to provide, such as:

National Insurance number
tax codes
pay rate (either annual or hourly)
additional payments like overtime, tips or bonuses, which might be shown separately

Standing statement of fixed deductions

If your employer does not set out any fixed deductions in your pay slip, they must give you a standing statement of fixed deductions.

The statement must:

be in writing
state the amount and intervals at which the deduction is made
contain the purpose or description of the deduction
be given to you before your first payslip with the fixed deductions
be updated at least every 12 months

If there are changes that affect your fixed deductions, your employer must give you written notice of the change or an amended statement.

Problem with your payslip

If you have a problem with your payslip, you should speak to your employer first to see if you can sort out the problem informally. If you have an employee representative or you are a member of a trade union you could ask for their help.

If this does not work, you might be able to make an application to an Industrial Tribunal.

If you didn't receive your full pay, you should check your payslip and contract of employment to see if they explain why you have not been fully paid.

The Labour Relations Agency (LRA) offers free, confidential and impartial advice on all employment rights issues for residents of Northern Ireland.

Pay and wages

Your wages are slightly different to your pay. Wages are the amount you are paid by your employer in connection to your job. Pay is the basic amount you should be paid (for example your monthly or hourly pay rate). Your wages could include:

any fees, bonuses, commission, holiday pay or other payments connected with your job
statutory payments (such as Statutory Sick Pay or Statutory Maternity Pay)
luncheon vouchers, gift tokens or other vouchers of fixed value that can be exchanged for money, goods or services

Your wages will not include:

loans or advances of wages
payments of expenses incurred in employment
pension and redundancy payments
lump sums on retirement or in compensation for loss of office
payments in kind (other than vouchers or tokens that can be exchanged or have a fixed value)
tips and other gratuities

You are protected against your employer making deductions from either your pay or wages. If your employer makes a deduction from something that does not count as your pay or wage (for example from your redundancy payment) you are not protected. However you may be able to make a claim for breach of contract if you are entitled to the payment under your employment contract.

Before making any deductions, your employer must tell you in writing the full amount you owe and make a demand for the payment. This must also be in writing.

Breach of employment contract

Rules for making deductions from your pay

Your employer is not allowed to make a deduction from your pay or wages unless:

it is required or allowed by law, for example National Insurance, income tax or student loan repayments
you agree in writing to a deduction
your contract of employment says they can
it is a result of any statutory disciplinary proceedings
there is a statutory payment due to a public authority
you have not worked due to taking part in a strike or industrial action
it is to recover an earlier overpayment of wages or expenses
it is a result of a court order

A deduction must not reduce your pay below the National Minimum Wage rate (except a limited amount for accommodation). This applies even if you have given your permission for it.

If you were overpaid in error, instead of making a deduction, your employer may try to recover the overpayment by making an application for a court order. For more information about how and when you might be able to prevent your employer from taking back an overpayment, you should speak to one of the following:

Advice NI
Labour Relations Agency
a solicitor
Solicitors directory

Agreeing to a deduction

If you have agreed in writing to a deduction then you must do this before your employer wishes to make the deduction.

For example, if you work in a restaurant and a customer leaves without paying, you must have a written, pre-standing agreement with your employer that any deductions can be made from your pay.

Your employer could ask you to sign a deductions agreement after that event, but they could not deduct any money unless it happened again. If your contract allows your employer to make wage deductions, you must have been given either:

a written copy of that part of the contract
a written explanation of it before your employer can make any deductions
Employment contracts

Retail work: extra protection from deductions

If you work in retail (such as a shop or restaurant) you have extra protection against deductions from your wages. If there is a shortfall in the till or stock shortage, your employer is not allowed to take more than 10 per cent of your gross wages for a pay period. If the 10 per cent isn't enough then your employer can continue to take money from your wages on subsequent paydays. However never more than 10 per cent at a time.

An example

There is a shortfall of £50 in the till. Your employer wants to deduct this from your earnings. You are paid £250 per week before any deductions like tax or National Insurance (£250 gross pay).

Your employer can take ten per cent of your gross earnings. They must only take £25 one week and then make another deduction from your next pay cheque for £25.

If you leave your job, your employer can take the full amount owed from your final pay.

What to do if you haven't been paid in full

If you didn’t receive your full pay you should check your payslip and contract of employment to see if they explain why.

If there does not seem to be a reason why your employer has not followed the rules for making deductions from your pay, speak to your employer. See if you can sort out the problem informally. If you have an employee representative or you are a member of a trade union you could ask for their help.

If this doesn't work, you have the right to go to an Industrial Tribunal to get your money. By making a breach of contract claim you can also try to reclaim any money you have lost (for example, bank charges) by not receiving the money on time.