Definition of earnings
What counts as net earnings
You must calculate Direct Earnings Attachment (DEA) deductions based on your employee’s net earnings. This means their pay after the following have been deducted:
- Income tax
- Class 1 National Insurance contributions
- Pension contributions (including workplace pensions, Additional Voluntary Contributions, and Stakeholder Pensions)
Only include earnings that are paid in money. Do not include benefits in kind or non-cash payments.
Earnings that count for DEA
You must include the following when calculating DEA deductions:
- Wages or salary
- Fees
- Bonuses
- Commission
- Overtime pay
- Most other payments on top of wages
- Occupational pensions (if paid with wages or salary)
Earnings that do not count
Do not include the following in DEA calculations:
- Statutory Maternity Pay
- Statutory Adoption Pay
- Statutory Paternity Pay (ordinary or additional)
- Statutory Sick Pay
- Redundancy payments or pay in lieu of notice
- Any pension, benefit, allowance or credit paid by DWP, a local authority or HMRC
- Guaranteed minimum pensions under the Pensions Act 1975
- Payments from public departments outside the UK or Northern Ireland
- Reimbursements for expenses
- Compensation payments
- Pay or allowances from the armed forces (unless paid by you as a special reserve force employer)
If you're unsure whether a payment should be included, contact us for advice.
