Salary Deductions: What Percentage Is Legally Allowed from Gross Salary?

Salary Deduction Percentage Inquiry

Kindly let us know how much percentage of salary deduction can be made from the gross salary. Is there any clause in the provisions of the act for deducting the salary, for example, 40%, 30%, or 20% of the gross salary advanced, etc.?

Your advice in this regard is highly solicited.

Regards,
Chitrappa
Asst. Manager HR & Admin

Understanding Salary Deductions under the Payment of Wages Act

If the Payment of Wages Act is applicable, the total deduction of up to 75% of wages is possible if the recovery towards a cooperative society is also involved. If cooperative recovery is not present, only 50% is possible. In cases where the Payment of Wages Act is not applicable, there is no limit under labor laws.

Regards,
Varghese Mathew

In addition to Mr. Mathew's point, there are also provisions in the Payment of Wages Act regarding the amount of advance that can be given and how it is to be recovered. Where the Payment of Wages Act does not apply (₹18,000 salary limit), it is a good idea to stay within the 50% limit to ensure that the concerned employee has subsistence wages.