Is My Company Making Unlawful Salary Deductions? Need Advice on My Pay Discrepancy

Hi everyone, my name is HARISH, and I'm from Vadodara. Recently, I joined a private limited company as an officer. My gross salary per month is Rs. 8138. After deducting Rs. 700 as a bonus, Rs. 420 as PF, and Rs. 318 as ESIC (all these are Employer Contributions), I should get Rs. 6700 as a net salary. However, they just paid me Rs. 6083 as a net salary. The reason is they deducted Rs. 420 as PF, Rs. 117.25 as ESIC, and Rs. 80 as professional tax from Rs. 6700.

My query is, is this lawful? Because what my appointment letter is showing, I'm not getting that much. Please tell me whether I should get Rs. 6700 or Rs. 6083. The salary breakup is attached for your reference.

Salary Breakup Review

I have attached my salary breakup. Please look into it and advise me on what should be my take-home salary.

Regards,
Harish

From seeing your salary breakup, your take-home salary of Rs. 6083 seems correct. No offer will indicate deductions under tax laws. It also will not indicate deductions under PF and ESI. What your organization is doing is legally correct.

Regards,
Sivasankaran T

This salary breakdown is provided for your reference, but it is not a payslip. The payslip should indicate all earnings and deductions. Ensure there is a single line break between paragraphs.

Understanding CTC and Net Salary

CTC means Cost to Company, which, when issuing an offer letter, includes all the deductions on the part of the employer as a part of CTC. This is a way of luring candidates to join them. However, as a prospective candidate, you should always refer to the net salary mentioned on the offer letter, which includes your salary after all the statutory deductions like PF, PT, ESIC, etc.

As per the attachment, the company's CTC is Rs. 8,138. That means the company is paying all these statutory components to the various statutory authorities. Bonus will be paid in the month of Oct or Apr as per the company's policy. When calculating your net salary, you should consider Basic+DA+HRA+Conveyance+Medical Allowance+Special Allowance, etc. From this gross salary, deduct the statutory deductions like PF, ESIC, PT & Income tax if applicable. The remaining balance is your in-hand/Net salary.

In your case, add 3,500 + 1,600 + 1,600 = 6,700 minus (PF - 12% of basic+DA, ESIC - 1.75% of gross salary & Prof Tax) i.e. (420 + 117.25 + 80), so your in-hand salary will be 6,083. Hope this clarifies your query.

Regards

Hi, this is Sadiq Ahmed from Chennai. My take-home salary is Rs. 20,000 per month. I want to know what deductions are made from the gross salary and how it finally comes to Rs. 20,000 as take-home pay. I need help understanding the complete structure and how to calculate it.

Regards,
Sadiq