The Employer Can Withhold 50% of Salary: In Which Cases the Law Allows It
An employer does not have the right to arbitrarily withhold funds from an employee's salary. The law clearly defines the grounds for such deductions, the formalisation procedure, and the maximum amounts that can be withheld. In most cases, an employer can deduct no more than 20% of earnings, and in certain cases explicitly provided for by law — up to 50%.
When an employer has the right to withhold funds from salary
The procedure for deductions from wages is regulated by Articles 127–129 of the Labour Code of Ukraine.
In particular, according to Article 127 of the Labour Code, an employer may make deductions from wages only in cases defined by law. Such grounds include:
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Untimely return of an advance payment;
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Erroneous overpayment of salary to an employee;
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Non-return of unused funds issued for a business trip;
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Compensation for damages caused to the enterprise;
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Deductions for unused days of annual leave in the case of employee dismissal.
What is the maximum amount of deductions from salary
According to Article 128 of the Labour Code of Ukraine, during each salary payment, the total amount of all deductions cannot exceed 20% of the salary payable to the employee.
At the same time, in cases separately provided for by the legislation of Ukraine, up to 50% of the salary may be withheld.
If deductions are made under several enforcement documents simultaneously, the employee must in any case retain at least 50% of their salary.
What rules must the employer follow
To make deductions, the employer must issue the appropriate order no later than one month after the debt is discovered or after the deadline set for the return of funds expires.
Article 129 of the Labour Code of Ukraine establishes a list of payments from which deductions are not allowed. In particular, withholdings cannot be made from severance pay, compensation, and other payments that, according to the law, cannot be subject to enforcement.
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