324Permitted deductions

324 Permitted deductions

(1) An employer may deduct an amount from an amount payable to an employee in accordance with subsection 323(1) if:

(a) the deduction is authorised in writing by the employee and is principally for the employee’s benefit; or

(b) the deduction is authorised by the employee in accordance with an enterprise agreement; or

(c) the deduction is authorised by or under a modern award or an FWC order; or

(d) the deduction is authorised by or under a law of the Commonwealth, a State or a Territory, or an order of a court.

Note 1: A deduction in accordance with a salary sacrifice or other arrangement, under which an employee chooses to:

(a) forgo an amount payable to the employee in relation to the performance of work; but

(b) receive some other form of benefit or remuneration;

will be permitted if it is made in accordance with this section and the other provisions of this Subdivision.

Note 2: Certain terms of modern awards, enterprise agreements and contracts of employment relating to deductions have no effect (see section 326). A deduction made in accordance with such a term will not be authorised for the purposes of this section.

(1A) However, an employer must not deduct an amount under paragraph (1)(a) if the deduction is:

(a) directly or indirectly for the benefit of the employer or a party related to the employer; and

(b) for an amount that may be varied from time to time;

unless the deduction, if it were a deduction referred to in subsection 326(1), would be a deduction made in circumstances prescribed under subsection 326(2) to be reasonable.

(2) An authorisation for the purposes of paragraph (1)(a):

(a) must specify:

(i) for a single deduction—the amount of the deduction; or

(ii) for multiple or ongoing deductions—whether the deductions are for a specified amount or amounts, or for amounts as varied from time to time; and

(aa) must include any information prescribed by the regulations; and

(b) may be withdrawn in writing by the employee at any time.

(3) Any variation in a specified amount of a deduction must be authorised in writing by the employee.