In our guide to the unlawful deduction of wages, we had a look at what happens if an employee makes a claim against you.

But what if you’re lawfully deducting an employee’s wage—what should your approach be? It will have to be in writing, so you have a legal record. To help you take the right approach with what can be a sensitive issue for your employees, we’ve included a sample letter for salary deduction.

You may also want to find out more about your legal standing regarding salary deductions. Remember, employees and workers receive legal protection from an unauthorised salary deduction.

So you’ll have to be sure your salary deduction letter to employee (or worker) is legally compliant. Keep this in mind before you write a letter for salary deduction.

Salary deduction letter to employee – template

[Date]

[Employee name, job title]

[Address]

RE:  Notice of Salary Deduction

Dear [employee name],

In accordance with [Section/Article; Policy or Contract], this is a Notice of Intent to take a Corrective Salary Decrease for £_______, equivalent to [#] days without pay on [date].

This Notice of Intent to take a Corrective Salary Decrease is due to [reason for making the deduction]. We met on [date] to discuss the salary deduction. At this meeting, you confirmed you understood the reasons for the deduction and you agreed to our motion to deduct [amount] from your payment on [date].

You have the right to respond to this Notice of Intent to take a Corrective Salary Decrease in writing, within [#] [consult contract/policy] calendar days from the date of receipt of this letter. Please direct your response to [reviewer name, phone, and email.]

If you have any questions regarding the contents of this letter, please don’t hesitate to contact me.

Yours sincerely,

[Name of Supervisor]

Looking for further assistance?

Do you need any further help with a sample payroll deduction letter? Remember, we’re here to help. Call us today on 0800 028 2420.

Disclaimer: Our sample letter for salary deduction is a basic guideline and your business should only use it as a reference point. For your official policy, you may need to consider additional local laws. Peninsula UK will not assume any legal liability should it arise after this template is used.