Parameters of Cutting salary from employees -As mandated by Law

Hi wonderful people,

Kindly advise - what are the parameters where we can legally cut salary from an employee?

If you can also share the article in the India Labor law if any …

Thank you in advance.


I can provide you with a general understanding of situations where salary deductions may be legally permissible under certain circumstances:

  1. Absence from Work: If an employee is absent from work without a valid reason or proper leave approval, the employer may deduct salary for the days of unauthorized absence.
  2. Loss or Damage to Company Property: If an employee causes loss or damage to company property due to negligence or misconduct, the employer may deduct salary to compensate for the losses incurred.
  3. Recovery of Advances or Overpayments: If an employer has provided an advance payment or overpaid an employee by mistake, they may deduct the excess amount from future salary payments, subject to legal limitations.
  4. Breach of Contractual Obligations: If an employee violates the terms and conditions of their employment contract, such as disclosing confidential information, competing with the employer, or engaging in misconduct, the employer may deduct salary as specified in the contract or as per applicable laws.
  5. Statutory Deductions: Employers are required to deduct certain statutory contributions from employees’ salaries, such as income tax, employee provident fund (EPF), professional tax, etc., as mandated by Indian labour laws.

It’s important to note that any salary deductions must comply with applicable labour laws, employment contracts, and any collective bargaining agreements or industry-specific regulations. Employers should also maintain transparency and communicate with employees regarding any proposed salary deductions, ensuring compliance with due process and fair treatment.

To ensure accurate and updated information based on your specific situation, it is advisable to consult with a legal professional or refer to the relevant labour laws, such as the Indian Labour Code or state-specific labour legislations.


Dear Syedadil,

Appreciate the revert… Thank you :slight_smile: