Wage Deductions, Pay Statements and Tips in Ontario
Your pay stub should explain exactly what you earned and what was taken off. Employers can only make some deductions, and some they can never make, even if you signed something.
- An employer can only deduct what the law requires, what a court orders, or an amount you authorized in writing for a specific amount or formula.
- Employers cannot deduct for a cash shortage, lost or stolen property, or a customer who leaves without paying.
- A pay statement must be given on or before each payday, showing the pay period, your rate, your gross pay, the deductions and your net pay.
- Tips belong to the employee. An employer cannot take or withhold them, though a fair tip pool can be allowed.
Deductions the law allows
- Income tax, Canada Pension Plan contributions and Employment Insurance premiums.
- Amounts a court order or a government authority requires, such as a garnishment.
- Amounts set by a collective agreement.
- An amount you authorized in writing, which must state the amount or a formula to work it out. Authorizing a specific amount for a benefit plan is an example.
Deductions an employer cannot make
- For a cash shortage, lost or stolen property or damage, as discipline or for unpaid customer bills, even when the employee signed an agreement.
- As a general charge or fee that was never agreed to in writing.
- As a way to recover money the employer says it overpaid, without the employee's written authorization or another lawful basis.
What your pay statement must show
- The pay period and the date of payment.
- Your wage rate and the hours worked, if the pay depends on hours.
- Your gross wages, with overtime, public holiday pay and vacation pay shown separately where they apply.
- Each deduction and its purpose, and your net pay.
- You can ask for a copy of your records, and the employer must keep them for three years.
Tips
Tips and other gratuities belong to the employee who receives them. An employer cannot withhold them, deduct from them or keep a share. A fair tip-sharing arrangement among employees can be allowed, but an employer or a manager cannot take a cut.
What to do about a bad deduction
- Compare the pay stub to your hours, your rate and what you agreed.
- Ask in writing for an explanation and, if it is not allowed, for the money back.
- If you signed a deduction form, keep a copy. A form that does not state an amount or formula may not be valid.
- File an Employment Standards claim if it is not fixed. See the guide on how a claim works.
Common questions
My employer deducted the cost of a broken item from my pay. Is that allowed?
Generally not. Deductions for damage, loss or shortages are not allowed, even if you agreed to them.
Do I get a pay stub if I am paid in cash?
Yes. The employer must still give a pay statement on or before each payday.
Who can help. Licensed paralegals can represent employees and employers in Employment Standards claims and at the Human Rights Tribunal of Ontario.
This guide is general information for people in Ontario, not legal advice. Rules, forms and deadlines change, and every situation is different. Check the current rule or speak to a licensed legal professional before you act.
Not sure where you stand? A licensed paralegal can look at your documents and tell you your options.
Book a Free Consultation
PIPEDA-compliant