Deductions from earnings

Find out which deductions from employee earnings are allowed and which aren’t. These standards come into effect on January 1, 2018.

The legislation on this page comes into effect on January 1, 2018

For information on Employment Standards legislation that is in force until December 31, 2017, go to http://work.alberta.ca/employment-standards.html

Basic rules

The Code allows certain legal deductions to be made from an employee’s earnings. The amount of each deduction, and the reason for the deduction, must be listed on the employee’s pay statement.

Employers can only take deductions from an employee’s earnings if the deduction is:

  • required by law, such as federal and provincial tax, contributions to the Canada Pension Plan, Employment Insurance premiums, or a garnishee of the court,
  • authorized by a collective agreement (e.g. union agreements), or
  • authorized in writing by the employee

When they start their job, employees can agree in writing to deductions for:

  • company pension plans
  • dental plans
  • social funds
  • registered retirement savings plans

Deductions for meals, lodging and uniforms

Meals and lodging

Employers can, with written authorization from the employee, reduce the employee’s wages below the minimum wage by a maximum of:

  • $4.41 for each day the employer provides the employee with lodging
  • $3.35 for each meal consumed by the employee; deductions can’t be made for meals not consumed

Uniforms

Additional information regarding the supply of an employee’s uniform will be available by January 1, 2018.

Deductions that aren’t allowed

Deductions an employer is not allowed to make under any circumstance include those for:

Faulty workmanship

Additional information regarding the definition of faulty workmanship will be available by January 1, 2018.

Examples of faulty workmanship include accidental damage to an employer’s vehicle or equipment, “walkouts” in a bar or restaurant, “gas-and-dash” at a service station, breakage in a restaurant, and mistakes in production.

Cash shortages or loss of property

Deductions for cash shortages or loss of property can’t be taken from the employee’s earnings if other persons have access to the cash or property. This includes access by the employer or their representative, other employees, or customers.

In cases where cash is involved, the employee must be allowed to count their float, account for their sales, and finalize their accounting of the cash. Unless these conditions are met and the employee provides written authorization, the employer can’t make deductions for cash shortages or loss of property.

How the law applies

Section 12 of the Employment Standards Code (Code) limits the deductions that employers are allowed to make on an employee’s pay.

Disclaimer: In the event of any discrepancy between this information and Alberta Employment Standards legislation, the legislation is considered correct.