More than a thousand days' wages were docked from rule-breaking inmates at Grendon & Springhill Prison over just three months, according to Ministry of Justice data.
The Howard League for Penal Reform says pay sanctions are too punitive and can inadvertently punish prisoners’ families too.
Grendon & Springhill inmates committed 163 proven offences between July and September, of which 66resulted in the culprit having their earnings stopped.
The offending prisoners had their earnings stopped for 1,068 days during the three months to September - the equivalent of nearly three years of lost pay.
HM Prison and Probation Service guidance states that adult prisoners can have their pay docked or stopped completely for up to 84 days if they are found guilty of an offence, and young offenders up to 42 days.
All the prisoners at Grendon & Springhill who lost pay were sanctioned for non-violent offences.
Of these, 18 were for disobeying direct orders or breaking prison rules, resulting in 287 days of lost wages.
The minimum wage for employed prisoners is £4 a week, but rates of pay vary greatly, with the average working inmate earning around £10 a week.
Prisoners can use their wages to rent TVs and buy extra food, clothes or toiletries, and they also have to pay for their own phone calls.
A 30-minute phone call from prison to a mobile phone costs £6.12 during weekdays, according to HM Prison Inspectorate, and the price of canteen items rises every year.
However, the minimum wage in prison has not changed since 2002 – meaning the real-term pay for working prisoners is dwindling.
Howard League chief executive Frances Crook said: “Stopping earnings has a huge impact on a prisoner’s quality of life.
“It’s also an issue because it punishes families as well. You can’t buy birthday cards for your kids, or speak to your mum on the phone. It hits very hard.”
The Howard League said it recognises that sanctioning rule breakers is necessary, but said an incentive and praise-focused system would be more effective.
Ms Crook added: "Justice is not a synonym for punishment.
“Prisons should be trying to create hope for the future, rather than trying to punish their way out of problems.”
An HM Prison Service spokesperson said: “It is right that governors who know their prisons best have the freedom to decide how to deal with those who break the rules.
“We are reviewing the existing disciplinary processes as part of our wider programme of prison reform.”
Across England and Wales, more than 15,000 incidents over the three months resulted in 167,000 days of lost pay.