When an employer may withhold wages
Article 23 of the Pay Protection Act lists what may be deducted from pay: withholding tax, social contributions, fines under the work rules, compensation for damage for which the employee is liable (Article 18 of the Employment Contracts Act), cash advances, a deposit and overpaid pay under flexible working hours. That list is exhaustive. Everything apart from tax and social contributions may not together exceed 20% of net pay at each payment.
Exceptions
The limit does not apply in case of fraud by the employee, or if they left before the compensation was settled. A wage garnishment or wage assignment follows its own rules. You may not unilaterally deduct overpaid wages from later pay; a set-off is possible by mutual agreement, concluded after the pay has become payable.
What is the risk?
A deduction the act does not allow, or a permitted deduction above the limit, is a level 3 offence under Article 163 of the Social Criminal Code: an administrative fine of € 1,000 to € 10,000, per employee concerned. The amount wrongly withheld remains pay the employee can claim.
What to do
Only withhold what Article 23 allows, and check at each payment that fines, advances and compensation together stay below the limit. To recover overpaid wages, ask for them back or record a set-off in writing after the pay has become payable.
Do you need to recover an advance or overpaid wages?
Read next
Sources
Every amount and deadline on this page was checked against these official sources, last consulted on .