(in employment law) Sums deducted from an employee's wages. The Employment Rights Act 1996 provides strict rules on what can be deducted from wages. Permitted deductions include those for income tax, National Insurance, and pension contributions (for employees who have agreed to be part of an employer's pension scheme). Deductions are also allowed when there has been an overpayment of wages or expenses in the past, when there has been a strike and wages are withheld, or when there is a court order, such as an order from the Child Support Agency or a court attachment of earnings order. There are special rules for those in retail employment. These provide, for example, that deductions of up to 10% may be made from gross wages for cash shortages or stock deficiencies.