Salary Deductions in South Africa: What Employers and Employees Need to Know

Salary deductions are a serious topic in South Africa, and both employers and employees must understand what is legally allowed. The Basic Conditions of Employment Act (BCEA) is the primary law that sets out rules and protects employees from unfair deductions.

What Is a Salary Deduction?

A salary deduction is when an employer withholds a portion of an employee’s pay for a specific reason. However, not all reasons are lawful, and deductions are only allowed under limited circumstances.

When Can Employers Deduct Money?

Employers may only deduct money from your salary in the following circumstances:

• Legal Requirements

  
  

  • Tax (PAYE): Employers must deduct income tax from salaries if the employee earns above the SARS threshold.

  • Unemployment Insurance Fund (UIF): By law, 1% is deducted from the employee’s salary and matched by the employer.

  • Skills Development Levy (SDL): For certain employers with higher payrolls, 1% goes to skills development.

• Court Orders or Arbitration Awards

  
  

  • Deductions ordered by a court, such as garnishee orders for debt, must be honoured by employers.

• Employee’s Written Consent

  
  

  • An employer can only make other deductions (like repayments for loans or advance payments) if the employee agrees in writing.

• Collective Agreements

  
  

  • Deductions allowed in terms of a collective agreement or sectoral determination are lawful.

Special Rules for Losses, Damages or Errors

• For losses or damages (e.g., till shortages or broken equipment), deductions can only be made if:

  
  

  • The loss happened during employment AND was the employee’s fault;

  • The employer followed a fair process and gave the employee a chance to respond;

  • The total deduction does not exceed the actual loss or 25% of salary at any one time.

• For overpayments (for example, when payroll accidentally pays more than is owed), employers are allowed to recover the money, but they must still follow legal rules. While consent is best practice, if the overpayment is a genuine payroll error, recovery of the extra funds does not necessarily require written consent but must still comply with law, and fair notice to the employee is required.

What Deductions are Prohibited?

Employers cannot deduct money:

• For mistakes (like breakages or losses) without a proper disciplinary process and the employee’s input.

• Unless required by law, collective agreement, arbitration award, or employee’s written consent.

• For purchases (like uniforms or goods) unless the employee agreed and the amount is specified.

What Must Appear on Your Pay slip?

Employers must clearly state:

• The amounts and reasons for any deductions

• The amount paid after deductions

• Employer and employee’s details, pay period, and rates

Pay slips are a legal requirement and help employees verify lawful deductions.

Example

If an employee damages company property, the employer cannot simply deduct the amount from the next salary. The employer must first investigate, conduct a fair hearing, give the employee a chance to provide their side, and get written consent. The deduction may not exceed 25% of the salary in a single month and must match the actual cost of the damage.

What Should Employees Do?

If you believe there has been an unlawful or unfair deduction from your salary, or you are owed wages or any payment by your employer, there are specific steps you can take—depending on how much you earn.

Understanding Section 73A of the BCEA

Section 73A of the Basic Conditions of Employment Act (BCEA) gives employees a way to claim any money owed by their employer, such as unpaid wages, leave pay, or other employment-related amounts. The process differs according to how much you earn, specifically, whether you are under or over the “earnings threshold” set by the government.

What is the “Earnings Threshold”?

The earnings threshold is a specific income set by the Minister of Employment and Labour every year. For 2025, the threshold is R261,748.45 per year (which is about R21,812.37 per month before any deductions like tax or pension).

If you earn BELOW the earnings threshold (“under-threshold”):

• You can go to the CCMA (Commission for Conciliation, Mediation and Arbitration) for help.

• You can claim for unpaid wages, overtime, leave, or any other amount the employer owes you according to your contract, the BCEA, the National Minimum Wage Act, or a collective agreement.

• This right is given by section 73A of the BCEA, which specifically states that “any employee or worker... may refer a dispute to the CCMA concerning the failure to pay any amount owing... in terms of this Act, the National Minimum Wage Act, 2018, a contract of employment, a sectoral determination or a collective agreement”.

If you earn ABOVE the earnings threshold (“over-threshold”):

• You cannot use the CCMA for unpaid wage claims under section 73A.

• Instead, you must take your complaint to court: this could be the Labour Court, High Court, Magistrate’s Court, or small claims court depending on the details and amount owed.

• Court processes are often more formal, might take longer, and you may need to pay for legal representation.

• Section 73A(2) of the BCEA clearly says that claims to the CCMA “do not apply to employees or workers earning in excess of the threshold prescribed by the Minister”.

• Employees over the threshold do still have the right to claim what is owed, but must do so through traditional court channels rather than the CCMA.

How do you check if you are under or over the threshold?

• Add up your regular income “before deductions” (do not include overtime, travel allowances, or employer pension/medical contributions).

• If the total is less than or equal to R261,748.45 per year (R21,812.37 per month), you are under the threshold and can use the CCMA.

Example

• Under-threshold: Zak earns R15,000 per month and didn’t get paid for his last two weeks of work. Zak can lodge a dispute with the CCMA.

• Over-threshold: Priya earns R25,000 per month with a management job. If her employer owes her pay, Priya must approach the Labour Court or another court, she cannot use the CCMA for a Section 73A claim.

What else can you do?

• Check your pay slips for errors or unexplained deductions.

• Query the deduction with your employer in writing.

• Ask your trade union or a Department of Labour official for advice if needed.

• If you qualify for Section 73A, use the CCMA’s simple process. If not, consider legal advice for the correct court action.

Duties for Employers

• Only make salary deductions in line with the BCEA and other legal requirements.

• Ensure proper paperwork, consent, and process are followed.

• Clearly document every deduction on the employee’s pay slip.

• Consult legal or HR professionals for uncertain cases.

Key Takeaways

• Deductions can only be made when required by law, court order, arbitration, collective agreement, or with clear written consent from the employee.

• Processes must always be fair and transparent.

• Both parties have the right to know the reasons and amounts involved in deductions.

• Employees are protected against arbitrary or unlawful salary deductions.

This article is provided for informational purposes only and not for the purpose of providing legal advice. For further information on the topic, please contact Pangea Labour Solutions:

Email: helpdesk@pangealabour.co.za

WhatsApp: 076 723 7983 

Written by: Johann Viljoen, Managing Director, Pangea Labour Solutions.