The Code on Wages lists the deductions an employer may make. They include:
- fines (s. 19);
- deductions for absence from duty;
- damage or loss of goods in the employee's custody;
- housing and amenities provided;
- recovery of advances and loans;
- income tax;
- PF, ESIC and other social security contributions;
- deductions ordered by a court;
- contributions to a cooperative society or insurance scheme, with the employee's written authorisation.
The total of all deductions in a wage period cannot be more than 50% of the wages. Fines need a notice of the acts and omissions, with prior approval. A fine cannot exceed 3% of wages for the period, and no fine may be imposed on an employee under 15. Fines go into a fund used for the employees' benefit.
Last reviewed 17-10-2026. General information, not legal advice for a specific case. Check the latest Act, Rules and notifications of the appropriate government before acting.