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Wage Deductions in Ontario: What Your Employer Can and Cannot Take From Your Pay
Receiving a paycheque smaller than you expected is frustrating. Under Ontario law, your employer cannot simply decide to take money from your wages. The Employment Standards Act, 2000 strictly limits when and how wage deductions can be made, and unauthorized deductions are one of the most common employment standards violations employees face.
There are only three circumstances where a deduction is permitted: it is required by statute, it is ordered by a court, or you have authorized it in writing. Anything outside these three categories is illegal under the Employment Standards Act, 2000.
Has your employer deducted money from your pay without your written consent?
Unauthorized wage deductions are a violation of the Employment Standards Act, 2000. You may be entitled to recover the deducted amounts through a Ministry of Labour complaint. Get advice before the two-year limitation period runs out.
Call: 1-800-771-7882 Speak With an Employment LawyerWhat deductions are permitted from wages in Ontario?
Under Part V of the Employment Standards Act, 2000, there are only three circumstances in which an employer may lawfully deduct from an employee's wages.
Statutory deductions required by law
Deductions required by federal or provincial legislation are always permitted. This includes income tax withholdings, Canada Pension Plan contributions, and Employment Insurance premiums. These are mandatory and the employer has no discretion about whether to make them.
Court-ordered garnishments
Where a court has issued an order requiring the employer to deduct a portion of the employee's wages, for example for child support or a civil judgment, the employer is required to comply with that order. The employee does not need to separately consent.
Written authorization from the employee
An employer may make a deduction where the employee has authorized it in writing and the deduction is for the employee's benefit. Common examples include union dues, group insurance premiums, or repayment of a salary advance the employee agreed to in writing. The written authorization must be specific and genuine.
What deductions are not permitted in Ontario?
Permitted deductions
- Income tax, CPP, and EI as required by law
- Court-ordered wage garnishments
- Union dues where authorized in writing
- Group benefit premiums where authorized in writing
- Repayment of a salary advance the employee agreed to in writing
- Other deductions specifically authorized by the employee in writing for their own benefit
Not permitted deductions
- Deductions for cash shortages or lost property unless the employee was the only one with access
- Deductions for customer walkouts or dine-and-dash situations
- Deductions for damaged equipment or property without a written agreement signed before the damage occurred
- Deductions for uniform costs, tools, or supplies that reduce pay below minimum wage
- Deductions made unilaterally to recover alleged overpayments without written consent
- Reductions in pay as discipline or punishment
Can an employer deduct for damaged property or equipment?
Generally, no. An employer cannot unilaterally deduct from an employee's wages to recover the cost of damaged property or equipment. A written agreement authorizing such a deduction must have been in place before the damage occurred and must have been genuinely agreed to by the employee. An agreement signed after the fact, or one that was presented as a take-it-or-leave-it condition, is unlikely to be treated as valid written authorization under the ESA.
Can an employer reduce your pay or withhold wages as discipline?
No. Reducing an employee's pay or withholding earned wages as a form of discipline or punishment is not permitted under the Employment Standards Act, 2000. Wages that have been earned belong to the employee. An employer who withholds pay for disciplinary reasons, or who docks pay in response to an employee's conduct, is in violation of the ESA regardless of what the employment contract says.
Is your employer making deductions from your pay that you did not authorize?
Unauthorized deductions are recoverable through a Ministry of Labour complaint. You may be entitled to repayment of all amounts improperly deducted, going back up to two years. Get advice before the deadline passes.
Find Out What You Can Recover Or call us: 1-800-771-7882What to do if your employer has made an unauthorized deduction
Review your pay stubs and identify the deduction
Check your pay stubs carefully and identify any amounts deducted that you did not authorize in writing or that are not statutory deductions. Keep copies of all pay stubs going back as far as possible.
Check your employment contract and any written agreements
Review your employment contract and any other documents you signed to confirm whether you authorized the deduction in writing. A deduction that appears in a standard-form contract you were required to sign may not constitute valid written authorization under the ESA.
Raise the issue with your employer in writing
If you believe the deduction was unauthorized, raise it with your employer in writing and keep a copy of your message and any response. In some cases the deduction was a payroll error that can be corrected quickly without a formal complaint.
File a Ministry of Labour complaint
If the issue is not resolved, you can file a complaint with Ontario's Ministry of Labour. The Ministry can investigate, order repayment of improperly deducted wages, and impose penalties on non-compliant employers. A two-year limitation period applies so act promptly.
Frequently asked questions about wage deductions in Ontario
Can my employer deduct from my wages in Ontario?
Only in limited circumstances. Under the Employment Standards Act, 2000, deductions are permitted where required by statute such as income tax and CPP, where ordered by a court, or where the employee has authorized the deduction in writing for their own benefit. Any deduction outside these three categories is illegal.
Can my employer deduct for a cash shortage or customer walkout?
Only where the employee was the only person with access to the cash or property involved. If other employees or managers also had access, the deduction is not permitted under the ESA. Deductions for customer walkouts or dine-and-dash situations are generally not permitted unless these narrow conditions are met.
Can my employer withhold my pay as discipline?
No. Withholding or reducing earned wages as a form of punishment or discipline is prohibited under the Employment Standards Act, 2000. Wages that have been earned belong to the employee. An employer who docks pay as discipline is in violation of the ESA regardless of what the employment contract says.
Can an employer deduct for a uniform or tools?
Only where the employee has authorized it in writing and the deduction does not reduce the employee's pay below the minimum wage. Deductions that bring an employee's effective hourly rate below minimum wage are prohibited under the ESA regardless of any agreement.
Can my employer deduct from my pay to recover an overpayment?
Not without your written consent. An employer who believes they have overpaid an employee cannot simply deduct the amount from future pay without a written agreement authorizing the repayment. Where no such agreement exists, the employer must seek repayment through other means. If you received an overpayment and your employer is threatening to deduct it, get legal advice before agreeing to anything.
What can I do if my employer made an unauthorized deduction from my wages?
You can file a complaint with Ontario's Ministry of Labour through the employment standards complaints process. The Ministry can order your employer to repay the improperly deducted amounts and impose penalties. A two-year limitation period applies from the date the deduction was made, so acting promptly protects your ability to recover the full amount.
Think your employer has made an unauthorized deduction from your wages?
If your employer has reduced your pay, withheld wages, or made deductions you did not authorize in writing, our team can help you assess your options and file a Ministry of Labour complaint if needed. We advise employees across Ontario on wage deductions, employment standards complaints, and unpaid wage claims. Contact us for a confidential consultation.
Call us at 1-800-771-7882 or fill out the form below and we will be in touch.