Paying wages: timing, bank, payslip and deduction rules
Under the Labour Law: when and where wages are paid, the bank requirement and the tax documentation rule, the payslip, late wages, wage deduction penalties, the attachment limit, advances and the limitation period.
Wages are the foundation of the employment relationship, and the Labour Law sets detailed rules on how they are paid. Below we bring together, with short answers, the seven questions employers ask most often.
1. When must wages be paid?
Wages are paid at least once a month. The payment period can be shortened to as little as one week by the employment contract or collective agreement. State the pay day clearly in the contract (e.g. "the 5th of every month") and keep to it consistently.
2. How must wages be paid?
- Bank requirement: employers with five or more employees pay wages into a bank account opened in the employee's name.
- Tax legislation: under the Tax Procedure Law, payments above a certain amount must be made and documented through a bank or PTT. Because the net minimum wage is above this amount, in practice paying wages through a bank has become necessary regardless of the number of employees.
- Paying in cash creates both an administrative fine and difficulty in proving that wages were paid.
3. Is it compulsory to give a payslip?
Yes. When wages are paid, the employee must be given a payslip showing how the wage was calculated, additions such as overtime and public holiday pay, and deductions such as tax, premiums, advances and maintenance. Paying through a bank does not remove this obligation. To check your payrolls: Payroll check
4. What happens if wages are late?
- An employee whose wages are not paid within 20 days of the pay day without a force majeure reason can refuse to perform work. This is an individual right; exercising it collectively does not count as a strike.
- The employment contract of an employee not working for this reason cannot be terminated, and no other employee can be hired in their place.
- Late wages bear interest at the highest interest rate applied to deposits.
- Non-payment or short payment of wages gives the employee the right to terminate for just cause and to severance pay: Resignation and termination for just cause
5. Can deductions be made from wages?
| Type of deduction | Rule |
|---|---|
| Tax, SGK premium, private pension | Made by law |
| Wage deduction penalty (disciplinary) | Must be provided for in the contract or collective agreement; cannot exceed two days' wages a month; notified immediately in writing with the reason |
| Advance | An advance given to the employee can be offset against wages with a written document |
| Attachment and maintenance | No more than one quarter of the wage can be attached; maintenance claims take priority |
| Damage to the employer | As a rule, the employer cannot unilaterally deduct damage caused by the employee from wages; the employee's written consent or a court decision is required |
Wage deduction penalties are collected in a separate account to be used for employees' training and social needs.
6. Should I set wages gross or net?
The contract should state clearly whether the wage is gross or net. If it does not, a dispute may arise. Where a net wage is agreed, changes in tax brackets increase the employer's cost: How is 2026 net salary calculated? · Salary calculator
7. When do wage claims become time-barred?
Wage claims and claims such as overtime, public holiday and holiday pay are subject to a five-year limitation period.
Employer checklist
- Is the pay day written in the contract and is it kept to?
- Are wages paid into a bank account?
- Is a payslip given every month?
- Are overtime and public holiday pay shown as separate items?
- Are advances and deductions based on written documents?
Legal basis: Labour Law No. 4857 arts. 32, 34, 35, 37 and 38; Regulation on the Payment of Wages, Premiums, Bonuses and All Similar Entitlements through Banks; Tax Procedure Law No. 213 repeated art. 257 and TPL General Communiqué Serial No. 459.