Guide

Pay: employer obligations

Direct Earnings Attachments: making deductions from an employee's salary

As part of welfare changes in Northern Ireland, you may now be asked as an employer to make deductions from an employee's salary in respect of monies owed by the employee to the Department for Communities (DfC). This method of recovery is known as a Direct Earnings Attachment or DEA.

The DfC Debt Management will write to you with an instruction to set up and maintain a DEA if any of your employees are affected.

How a DEA works

Any instruction you receive from the DfC will state the total amount to be recovered from the employee's salary. It is important to note that this is the total amount owed to the DfC and not a deduction amount which must be calculated as a percentage of net earnings. To operate the DEA, you will need to take the following steps:

  • for each salary cycle, calculate how much to deduct from your employee’s salary
  • check if your employee has other debt orders to pay and if they take priority over a DEA
  • advise your employee that money will be deducted from their salary in respect of monies owed to the DfC
  • deduct the money from your employee’s salary
  • pay the money to DfC no later than the 19th day of the month following deduction in your payroll
  • continue to make employee deductions and payments to the DfC until the total amount stated in the instruction has been repaid or the DfC tells you to stop

Record keeping for DEA

You must keep a record of deductions and tell the DfC when an employee leaves your company.

You could be fined up to £1000 if you don’t make DEA deductions when requested to.

Download Direct Earnings Attachment employer guidance (PDF, 635K).

Employer help with DEA or payments

You can also call the employer helpline if you have questions about how to run a DEA or pay the DfC:

Employer Helpline
0300 123 1030 (Monday to Friday 9:00 to 17:00)

Calculating the DEA deduction

There are two deduction percentage rates which may be used for calculation – Standard Rate and Higher Rate.

The instruction from DfC Debt Management will let you know which of these rates to apply. The rate may change throughout the life of the DEA, from Standard to Higher and vice versa, and you will be notified of this by letter.

To calculate the deductions from your employee’s salary, for each salary cycle you’ll have to:

  • work out the employee’s earnings after tax, class 1 National Insurance and workplace pension contributions (net earnings)
  • use the tables below (standard or higher) to establish the appropriate percentage deduction rate
  • multiply the net earnings figure by the percentage rate to calculate the DEA amount

Note: if you are calculating a DEA based on a daily rate, you must also multiply the daily rate figure by the number of days in the pay period.

If payments are made every two or four weeks, calculate weekly pay and deduct the percentage in the table.

You should also check if the employee has other debt orders and if they take priority over a DEA.

If the total of all deductions is more than 40 per cent of the employee’s net earnings, the DEA must be adjusted.

On occasion, an employee may agree a fixed rate DEA deduction with DfC. In such circumstances, DfC Debt Management will notify you that a fixed rate should be applied.

Download Direct Earnings Attachment detailed guidance (PDF, 342K).


TABLE A: DEDUCTIONS FROM EARNINGS RATE (Standard)

AMOUNT OF NET EARNINGS

(Net earnings are gross pay, less income tax, Class 1 National Insurance and superannuation contributions)

DEDUCTION RATE TO APPLY

(Percentage of net earnings)

Daily Earnings

Weekly Earnings

Monthly Earnings

Up to £15

Up to £100

Up to £430

Nil

Between £15.01 and  £23

Between £100.01 and  £160

Between £430.01 and  £690

3%

Between £23.01 and  £32

Between £160.01 and  £220

Between £690.01 and  £950

5%

Between £32.01 and  £39

Between £220.01 and  £270

Between £950.01 and  £1,160

7%

Between £39.01 and  £54

Between £270.01 and  £375

Between £1,160.01 and  £1,615

11%

Between £54.01 and  £75

Between £375.01 and  £520

Between £1,615.01 and  £2,240

15%

  £75.01 or more

 £520.01 or more

 £2,240.01 or more

20%

 


TABLE B: DEDUCTIONS FROM EARNINGS RATE (Higher)

AMOUNT OF NET EARNINGS

(Net earnings are gross pay, less income tax, Class 1 National Insurance and superannuation contributions)

DEDUCTION RATE TO APPLY

(Percentage of net earnings)

Daily Earnings

Weekly Earnings

Monthly Earnings

Up to £15

Up to £100

Up to £430

5%

Between £15.01 and  £23

Between £100.01 and  £160

Between £430.01 and  £690

6%

Between £23.01 and  £32

Between £160.01 and  £220

Between £690.01 and  £950

10%

Between £32.01 and  £39

Between £220.01 and  £270

Between £950.01 and  £1,160

14%

Between £39.01 and  £54

Between £270.01 and  £375

Between £1,160.01 and  £1,615

22%

Between £54.01 and  £75

Between £375.01 and  £520

Between £1,615.01 and  £2,240

30%

  £75.01 or more

 £520.01 or more

 £2,240.01 or more

40%

What counts as earnings?

When calculating DEA payments, you should include as earnings:

  • wages and salary
  • fees
  • bonuses
  • commission
  • overtime pay
  • occupational pensions if paid with wages or salary
  • compensation payments
  • Statutory Sick Pay
  • most other payments on top of wages
  • pay in lieu of notice

Don’t count:

  • Statutory Maternity Pay
  • Statutory Adoption Pay
  • Ordinary or Additional Paternity Pay
  • guaranteed minimum pension
  • any money that the employee gets from the Government e.g. benefits, pensions or credits
  • Statutory Redundancy Pay
  • expenses