Provincial Guidelines For Overpayment Deductions – Humi

We can help you recover the overpayment if you accidentally overpaid an employee. Before setting up any deductions, please review this article to understand your province's rules.

The article summarizes each province's overpayment/deduction rules based on the Employment Standards Act (ESA). Depending on your location, you may need to provide written notice or obtain consent before recovering overpaid amounts.

After familiarizing yourself with your province's ESA guidelines, follow the steps in this article to create a deduction and recover the funds.

Alberta

If an overpayment happened because of a payroll mistake (for payments made on or after November 1, 2020), employers don’t need to get written permission from the employee to take back the extra money. But, they do need to give the employee a heads-up in writing before making the deduction. Also, they can only deduct for mistakes that happened in the last six months. Source

British Columbia

If an employer overpays an employee, they can't just deduct the extra amount from future paychecks on their own. The employee needs to give written permission for the deduction through a written assignment of wages. If the employee doesn’t agree to this arrangement, the employer can’t withhold any part of the wages to recover the overpayment. Source

Manitoba

Employers can only make deductions from wages when these are to compensate for any cash advances or payroll errors. Source

New Brunswick

Employers should reach out to the Employment Standards Branch before making any deductions from an employee’s wages, except for those required by law, such as EI, Canada Pension, and court-ordered deductions. Source

Newfoundland and Labrador

Overpayment of wages can be deducted from future wages. Source under 17. Subsection 36(3)

Nova Scotia

Lawful deductions include recovering pay advances and overpayments. Source

Ontario

In cases of overpayment, the employer can recover the money from the employee’s wages, including regular wages, vacation pay, or termination pay. Source

Prince Edward Island

An employer can only make certain deductions from an employee’s pay as the result of a previous advance of pay to the employee. Source under Pay Deductions section

Saskatchewan

Repayment plans typically apply to active employees (those with a status of Active or Definite Leave of Absence) and must be completed within the specified term. Repayments should occur over the same number of pay periods as the overpayment or sooner, ensuring compliance with collective agreements. If applicable, employers should complete the Overpayment Repayment Plan Approval Request Form. Source

Northwest Territories

Employers cannot deduct damages, breakages, shortages, or debts from an employee's paycheck without written authorization. Exceptions include taxes, government payments (e.g., employment insurance), and court-ordered payments. Deductions without authorization are unlawful unless they directly benefit the employee, such as rent or paying a charge account balance. Source

Nunavut

What can be deducted from an employee's paycheck?

Deductions required by federal or provincial laws such as taxes and employment insurance premiums.
Deductions authorized by court order such as child support garnishment or by a collective agreement such as union dues.
Overpayment of wages.
Specific amounts authorized in writing by the employee. Source

Yukon

The employer should have a prior written consent from the employee for any deductions in the regular and vacation pay, according to Checkmark Business Solutions. Source under Deductions Pg. 5