An Employer's Guide to Direct Earnings Attachments (DEA) for the Collection of Housing Benefit Overpayments
6. How is a DEA calculated?
6.1 When calculating the DEA deductions amount, you must:
- ensure that your employee has enough net earnings in the pay period for you to calculate a deduction (see tables A and B below)
- check that the correct percentage rate has been applied against those net earnings
- check that the total of all the deductions does not leave the employee with less than the protected earnings proportion, which is 60% of their total net earnings during the calculating period to which the deduction relates
- work out the employee's net earnings (as previously explained in sections 3, 4 and 5)
- use table A or B to find the right deduction percentage rate for the employee's net earnings
- apply the percentage figure against the net earnings figure to calculate the amount to be deducted
6.2 Amounts to be deducted by the employer
Table A: Where earnings are paid weekly
Amount of net earnings | Deduction (per cent of net earnings) |
|---|---|
£100 or less | Nil |
Exceeding £100 but not exceeding £160 | 3% |
Exceeding £160 but not exceeding £220 | 5% |
Exceeding £220 but not exceeding £270 | 7% |
Exceeding £270 but not exceeding £375 | 11% |
Exceeding £375 but not exceeding £520 | 15% |
Exceeding £520 | 20% |
Table B: Where earnings are paid monthly
Amount of net earnings | Deduction (per cent of net earnings) |
|---|---|
£430 or less | Nil |
Exceeding £430 but not exceeding £690 | 3% |
Exceeding £690 but not exceeding £950 | 5% |
Exceeding £950 but not exceeding £1,160 | 7% |
Exceeding £1,160 but not exceeding £1,615 | 11% |
Exceeding £1,615 but not exceeding £2,240 | 15% |
Exceeding £2,240 | 20% |
a) The protected earnings level
The total of all deductions (the DEA plus any other deductions in place) cannot leave the employee with less than the protected earnings proportion, which is 60% of their total net earnings during the calculating period to which the deduction relates.
b) Employees who are paid every 2 weeks
If an employee is paid 2 weekly, the total net wage is divided by 2 and table A is used to check the percentage rate.
c) Employees who are paid every 4 weeks
If an employee is paid 4 weekly, the total net wage is divided by 4 and table A is used to check the percentage rate.
Do not leave an employee with less than 60% of their total net earnings.
d) Holiday pay
If an employee is paid a wage which includes holiday pay paid in advance, the net wage is averaged, and the percentage rate applied to the average figure. For example:
The employee received one week's wage and 2 weeks holiday pay. Total net payment for 3 weeks = £850.
- £850 ÷ 3 = £283.33
- £283.33 x 11% = £31.17
Total deduction from the net wage for 3 weeks of £850 = £93.51 (£31.17 x 3)
e) Rounding
The exact amount of the net wage is used against table A and B. If the percentage amount calculated results in a fraction of a penny, it is rounded to the nearest whole penny, with a result of exactly half a penny being rounded down to the nearest whole penny below, as follows:
- net wage £235.63 per week
- £235.63 x 7% = £16.4941
- weekly deduction = £16.49
- net wage £1547.99 per month
- £1547.99 x 11% = £170.278
- monthly deduction = £170.28
f) Administrative costs - what you can charge your employee
For each pay period where a calculation results in a DEA deduction, you may also take up to £1 from your employee's earnings towards your administrative costs. You can take this even if it reduces the employee's income below the 60% protected earnings proportion.
Where you decide to apply an administration charge of £1, this deduction may bring the employees pay below the National Minimum Wage. Employers should check the GOV.UK website, or contact the ACAS helpline for advice.
It is a criminal offence for employers to not pay someone the National Minimum Wage or National Living Wage.
The administration charge of £1 is only applied when a DEA deduction is actually made, and cannot be deducted for any pay period when no DEA deduction is made.
Share this page
