Key facts
- An AEO is a legal instruction sent to the employer by a court, local authority, or the Child Maintenance Service.
- Employers must comply — failure to implement an AEO can result in a fine of up to £1,000 and the employer becoming liable for the debt.
- There is a strict priority order when multiple deductions apply to the same employee.
- Deductions are taken from net earnings (after tax, NI, and pension contributions) unless the order specifies otherwise.
- Council tax AEOs follow fixed percentage tables set by regulations rather than a court-specified amount.
What Is an Attachment of Earnings Order?
An Attachment of Earnings Order (AEO) is a legal mechanism that compels an employer to deduct money from an employee’s earnings and send it to a third party — typically a court, a local authority, or the Child Maintenance Service — to repay a debt.[1]
AEOs are used to recover various types of debt, including:
- Court fines — imposed by magistrates’ or crown courts
- Council tax arrears — issued by the local authority via the magistrates’ court
- Child maintenance — through a Deduction from Earnings Order (DEO) from the Child Maintenance Service
- County court judgments — civil debts enforced through the county court
- Compensation orders — ordered by criminal courts
Employer Obligations
When you receive an AEO, you must:[1]
- Start deductions from the next available payday (or the date specified in the order)
- Calculate the correct amount based on the order type and the employee’s earnings
- Send the deducted money to the specified authority by the required date
- Notify the issuing authority if the employee leaves your employment
- Keep records of all deductions made under the order
Key point: Employers cannot dismiss an employee because they have received an AEO. Doing so could constitute unfair dismissal. The order is a legal matter between the employee and the creditor — the employer is simply the mechanism for collection.
Types of Attachment Orders
Different types of order have different rules for calculation:
| Order Type | Issued By | Calculation Basis |
|---|---|---|
| Court fine AEO | Magistrates’ court | Percentage of net earnings per deduction table |
| Council tax AEO | Magistrates’ court (for local authority) | Fixed percentage of net earnings per regulation table |
| Child maintenance DEO | Child Maintenance Service | Specified amount (normal deduction) plus any arrears amount[3] |
| County court AEO | County court | Fixed amount specified in the order, subject to a protected earnings rate |
Priority Order of Deductions
When an employee has multiple deductions, you must apply them in the following priority order:[1]
- Income Tax and National Insurance (always deducted first)
- Pension contributions under auto-enrolment (if applicable)
- Child maintenance DEO (Deduction from Earnings Order)
- Council tax AEO
- Court fines AEO
- Other county court AEOs (in date order of receipt)
- Student loan and postgraduate loan repayments
Tip: If an employee does not earn enough for all deductions to be made, apply them strictly in priority order. Do not split amounts proportionally across lower-priority orders — each order is satisfied in full (or as far as earnings allow) before moving to the next.
Council Tax AEO Deduction Table
Council tax Attachment of Earnings Orders use a fixed percentage table based on the employee’s net earnings (after tax, NI, and pension):[2]
| Daily Net Earnings | Deduction Rate |
|---|---|
| Up to £18.65 | 0% |
| £18.66 – £27.72 | 3% |
| £27.73 – £37.27 | 5% |
| £37.28 – £55.17 | 7% |
| £55.18 – £79.62 | 12% |
| £79.63 – £108.92 | 17% |
| Over £108.92 | 17% |
The employer may also deduct £1 per pay period as an administration charge from the employee’s pay for each council tax AEO.
Protected Earnings
Some AEOs (particularly county court orders) include a protected earnings rate. This is the minimum amount the employee must take home after the deduction. If the employee’s net pay would fall below this amount, the deduction must be reduced or skipped for that pay period. Any shortfall is carried forward to the next period.[1]
When the Employee Leaves
If an employee subject to an AEO leaves your employment, you must:
- Make a final deduction from their last pay (if applicable)
- Notify the issuing court or authority within 10 days, providing the employee’s last known address and new employer if known
- Return the AEO to the issuing authority
Frequently Asked Questions
Can an employer refuse to apply an Attachment of Earnings Order?
No. Employers are legally obligated to comply with an AEO. If you fail to make the deductions, you can be fined up to £1,000 by the court and may become personally liable for the amounts you should have deducted. If you have genuine difficulties implementing the order, contact the issuing court or authority for guidance.
What is the priority order when an employee has multiple deductions?
The priority order is: (1) Income Tax and National Insurance, (2) pension contributions under auto-enrolment, (3) child maintenance through a Deduction from Earnings Order (DEO), (4) council tax Attachment of Earnings Orders, (5) court-ordered fines, (6) other court-ordered AEOs, (7) student loan repayments. If there is insufficient pay to cover all orders, higher-priority deductions take precedence.
Does the employee need to agree to the deduction?
No. An AEO is a legal order and does not require the employee’s consent. The employer must inform the employee that an order has been received and begin deductions as instructed. However, the employee can apply to the court to have the order varied if they believe it causes undue hardship.
Can the employer charge an administration fee?
For council tax Attachment of Earnings Orders, the employer may deduct an administration charge of £1 per deduction from the employee’s pay. For other types of AEO, the employer generally cannot charge a fee unless specifically permitted by the order or legislation.
Further Reading
- Statutory Deductions (Tax, NI, Student Loan) — the primary deductions that take priority over AEOs
- Payslip Legal Requirements — how to show AEO deductions on payslips
- Calculating Final Pay (Leavers) — handling AEOs when an employee leaves
- The P45 Process — issuing the P45 when an employee with an AEO departs
Looking for simple Payroll software?
#GoFile is HMRC-recognised and trusted by 50,000+ UK businesses. Set up in minutes, file with confidence.
Get Started For FreeNo credit card required · Cancel anytime
Sources
- Attachment of Earnings Orders — GOV.UK
- Council tax Attachment of Earnings — GOV.UK
- Child maintenance: Deduction from Earnings Orders — GOV.UK