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Staff, rotas and tips
Can a pub take a till shortage out of a bar worker's wages? The 10% cap per pay day, the 12-month limit and written consent, worked on an £85 shortfall
A till is £85 short; can it come out of a bar worker's pay? Consent, the 10% cap per pay day and the 12-month limit, worked for three rotas.
A manager cashes up on Sunday night and the till is £85 short. The bar worker who ran it says she gave the right change. The manager's next thought is the wage slip. The law does allow some deductions for a shortage, but with three conditions that are easy to miss, and a cap that changes how long it takes.
Is a bar worker in "retail employment"?
Section 17 of the Employment Rights Act 1996 defines retail employment as employment involving the worker carrying out retail transactions directly with members of the public, or collecting money for retail transactions carried out by others, "whether or not on a regular basis". A retail transaction is "the sale or supply of goods or the supply of services". Serving drinks and food over a bar or at a table fits that wording. The section 18 limits below apply to a cash shortage, meaning a deficit in amounts received in retail transactions, and to a stock deficiency. A worker who only cleans or washes up does not carry out those transactions, so these particular limits do not describe her. Whether a deduction is allowed at all is still a section 13 question.
Condition 1: the deduction must be authorised
Section 13 says an employer must not deduct from wages unless the deduction is required or authorised by law, authorised by a relevant term of the worker's contract, or the worker "has previously signified in writing his agreement or consent". The word "previously" matters. A note on the till roll after the shortage is found, or a manager saying "you'll cover it", is not previous written agreement. If the contract or a signed document from before the shift does not mention shortages, the safer reading is that the deduction is not authorised. That is a reading of the section, not a ruling; we did not read case law.
Condition 2: no more than one-tenth of gross pay on any pay day
Section 18(1) says deductions for cash shortages or stock deficiencies on a pay day must not exceed one-tenth of the gross wages payable to the worker on that day. The cap is per pay day, so a large shortfall is spread across several pay days.
The worked example below is our own. It uses the £12.71 hourly rate for workers aged 21 and over (GOV.UK, from April 2026) and a weekly pay day with no overtime or tips:
| Weekly hours | Gross pay | One-tenth cap | £85.00 shortfall taken as | Pay days |
|---|---|---|---|---|
| 12 | £152.52 | £15.25 | five of £15.25 (£76.25) then £8.75 | 6 |
| 24 | £305.04 | £30.50 | £30.50, £30.50, £24.00 | 3 |
| 40 | £508.40 | £50.84 | £50.84, £34.16 | 2 |
The sums: 12 x £12.71 = £152.52; 24 x £12.71 = £305.04; 40 x £12.71 = £508.40. One-tenth of £305.04 is £30.504, which we round down to £30.50 so the cap is never exceeded. For the 24-hour worker, £30.50 + £30.50 = £61.00, and £85.00 - £61.00 = £24.00, which is below the cap. The 12-hour check is 5 x £15.25 = £76.25 and £85.00 - £76.25 = £8.75; the 40-hour check is £50.84 + £34.16 = £85.00.
Pay frequency changes the picture. A monthly-paid 24-hour worker earns £305.04 x 52 / 12 = £1,321.84 a month, so the cap is £132.18 and the whole £85.00 fits in one pay day. Two workers with the same shortfall and the same hours can be treated differently by the pay calendar alone.
Condition 3: start within twelve months
Section 18(2) and (3) say that a deduction for a shortage is only treated as made in accordance with section 13 if it, or the first deduction in a series, is made within twelve months beginning with the date the employer established the shortage, or the date it ought reasonably to have done so, if earlier. Waiting for the end of a long investigation does not stop that clock. Six weekly pay days is well inside it; the point is that the first deduction cannot be left lying.
What we could not confirm
We did not read section 20, which deals with the final instalment of wages, so we cannot say what applies when a worker leaves with a shortfall unpaid. We also did not read HMRC guidance on how a deduction interacts with the National Minimum Wage, so we cannot say whether a deduction would take her pay below the minimum for that period. Our guide on uniform deductions and minimum wage covers the HMRC rule for kit, and the same caution applies. Do not take a shortage from a worker's pay on the strength of this page alone.
A short routine for the manager
- Check the paperwork first. Is there a signed term or consent that pre-dates the shift? If not, treat the deduction as not allowed.
- Write down the date you found the shortage. That starts the twelve months.
- Work out the cap from gross pay for that pay day, not from the size of the shortfall.
- Keep the till evidence. Cash-up sheets and the till report are what let you show the figure. See the new starter checklist for where consent and contract terms should sit on day one.
- Keep tips separate. Whether they count as pay is covered in do tips count towards minimum wage.
Overlyft can set up new AI staff who join your team and take on the end-of-night cash-up check: they compare the till report with the counted takings, record the difference and the date it was found, and tell the manager the one-tenth cap for that worker's pay day, with a person deciding what, if anything, happens next.
Legislation and rates are as read on the date shown. This is general information, not advice.
Where this comes from: legislation.gov.uk, Employment Rights Act 1996, section 13 (right not to suffer unauthorised deductions: statutory provision, relevant contract term, or prior written consent), section 17 (definitions of retail employment, cash shortage and retail transaction) and section 18 (limit of one-tenth of gross wages on a pay day; deduction or first of a series made within twelve months of the employer establishing, or ought reasonably to have established, the shortage); GOV.UK, National Minimum Wage and National Living Wage rates (£12.71 for 21 and over from April 2026); all read 26 October 2026. We did not read section 20 (final instalments of wages), the GOV.UK page on deductions (it returned a not-found error) or HMRC guidance on how deductions interact with minimum wage pay.
AEO Lookup editorial team
We write practical guides for people who run small UK firms, and we check every fact against its source on the date shown. Read how we review, or tell us if something has changed.
