Deduction tables
The following tables should be used when calculating the amount you should deduct from the employee's net earnings.
Net earnings
Net earnings are earnings after the deduction of:
- income tax
- class 1 national insurance contributions
- superannuation contributions and
- any deduction with a higher priority than the AOE
Earnings are defined as:
- wages or salary (including any fees, bonus, commission, overtime pay or other payments in addition to wages or salary payable under a contract of service)
- statutory sick pay
Earnings do not include:
- pay and allowances of members of the armed forces (other than that paid by an employer to a person as a special a member of a reserve force)
- statutory maternity/paternity pay, and statutory adoption pay (note that it is statutory payments that are not included – contractual payments are included)
- tax credits
- allowances payable in respect of disablement or disability
Table 1: Monthly paid employees
| Net earnings | Percentage payable | Minimum amount | Maximum amount |
|---|---|---|---|
| Up to £300 | No deduction | £0.00 | £0.00 |
| Over £300 but not more than £550 | 3% | £9.00 | £16.50 |
| Over £550 but not more than £740 | 5% | £27.50 | £37.00 |
| Over £740 but not more than £900 | 7% | £51.80 | £63.00 |
| Over £900 but not more than £1420 | 12% | £108.00 | £170.40 |
| Over £1420 but not more than £2020 | 17% | £241.40 | £343.40 |
| Over £2020 | 17% in respect of the first £2020 and 50% in respect of the remainder | £343.40 | Unlimited |
Table 2: Weekly paid employees
| Net earnings | Percentage payable | Minimum amount | Maximum amount |
|---|---|---|---|
| Up to £75 | No deduction | £0.00 | £0.00 |
| Over £75 but not more than £135 | 3% | £2.25 | £4.05 |
| Over £550 but not more than £740 | 5% | £27.50 | £37.00 |
| Over £135 but not more than £185 | 7% | £12.95 | £15.75 |
| Over £185 but not more than £225 | 12% | £27.00 | £40.20 |
| Over £225 but not more than £355 | 17% | £56.95 | £85.85 |
| Over £505 | 17% in respect of the first £505 and 50% in respect of the remainder | £85.85 | Unlimited |
Table 3: Daily paid employees
| Net earnings | Percentage payable | Minimum amount | Maximum amount |
|---|---|---|---|
| Up to £11.00 | No deduction | £0.00 | £0.00 |
| Over £11 but not more than £20 | 3% | £0.33 | £0.60 |
| Over £20 but not more than £27 | 5% | £1.00 | £1.35 |