Deductions from employees' compensation

Good intentions can easily lead to costly disputes when deductions are incorrectly made from employees' compensation. This is one of the most common violations identified by inspectors from the Department of Employment and Labour during farm visits. Such mistakes can cost employers in terms of money, time, and working relationships.

- Tiaan Botes, legal advisor, LWO Employers Organisation

Sectoral Determination 13, as gazetted under the Basic Conditions of Employment Act, 1997 (Act 75 of 1997), provides clear rules governing deductions.

What does the law say?

Deductions required by law, such as income tax (PAYE) and contributions to the Unemployment Insurance Fund (UIF), must be made by the employer. These deductions are mandatory and nonnegotiable. The same applies to deductions made in terms of a court order or arbitration award against the employer.

Under certain conditions, an employer may deduct up to 10% of an employee's regular wages for food and up to 10% for housing. However, the following conditions apply:

• Food or accommodation must be provided consistently and regularly as part of the employment.

• No additional deductions for food or housing may be made from the employee's remuneration.

• The deduction may not exceed the actual cost to the employer of providing the food or housing.