UNRAVELING THE MYSTERY

Navigating Deductions from Employee’s Remuneration

The Basic Conditions of Employment Act No 75 of 1997 (“BCEA”) serves as a cornerstone in regulating various aspects of the employer-employee relationship ensuring fair labour practices within a workplace. This article explores the intricacies of what constitutes permissible and impermissible deductions under the BCEA and what procedural requirements employers must adhere to when making a deduction.


Under the BCEA, employers are allowed to make specific deductions from an employee’s remuneration, provided certain conditions are met. These permissible deductions include:

  1. Statutory Deductions: Employers can make deductions mandated by law such as income tax and contributions to the Unemployment Insurance Fund (UIF).
  2. Pension and Provident Fund Contributions: Employers can deduct contributions to approved pension or provident funds as agreed upon in the employment contract.
  3. Medical Aid Contributions: Deductions for medical aid contributions are permissible if the employee has consented to such deductions in the employment contract.
  4. Trade Union membership: Deductions for union dues are allowed where an employee is a member of a registered trade union.
  5. Over-payments: The Labour Court confirmed in Sekhute and Others v Ekurhuleni Housing Company SOC (J1862/17) [2017] ZALCJHB 318, If an employer has overpaid an employee in error, they are entitled to recover the overpaid amount without the employee’s express consent.

The BCEA prohibits an employer from making any other deductions from an employee’s remuneration without the employee’s consent in writing. Even if the employee has consented to the deduction, the provision further limits the scope of the consent by stating that a deduction made to reimburse an employer for loss or damage caused by the employee may only be done if:

  1. The loss or damage occurred in the course of the employment of the employee and was due to the fault of the employee;
  2. The employer followed a fair procedure and gave the employee a reasonable opportunity to show why the deduction should not be made;
  3. The total amount of the debt does not exceed the actual amount of the loss or damage; and
  4. The total deduction from the employee’s remuneration does not exceed one-quarter of the employee’s remuneration in money. This 25% cap encompasses all deductions, including voluntary ones for items like medical aid, pension or provident fund contributions, and other agreed-upon deductions. Consequently, if an employer makes a deduction which surpasses 25% of the employee’s remuneration, even with written consent, such employer will be in contravention of the BCEA.

It is however important to note that despite voluminous referrals to the CCMA about unlawful deductions, the Labour court in O’Reilly v CCMA and Others JR 2395 19 confirmed that the Labour Court has exclusive jurisdiction over all disputes arising from the BCEA and held that the CCMA does not have jurisdiction to determine a claim regarding alleged unlawful deductions from an employee’s remuneration. Accordingly, it follows that the only matters that the CCMA may adjudicate are for monies owed to an employee in terms of Section 73A of the BCEA, which includes salaries, bonuses, amounts due in terms of the National Minimum Wage Act, and any amounts that the employer is obligated to pay in terms of the BCEA, but not deduction disputes.

Given the above it is crucial employers are aware of the provisions and limitations imposed by the BCEA when making deductions from an employee’s remuneration. Whether an employee has provided consent or upon termination of employment, employers should be cognizant of the potential legal ramifications, as exceeding the prescribed limits or failure to comply with the BCEA could lead to defending against unlawful deduction claims in court.