Salary Deducted Without Explanation? Know Your Rights and Next Steps

Salary Deducted Without Explanation? Know Your Rights and Next Steps

Your salary arrives, but the amount is lower than expected. When you check the payslip, you notice an unfamiliar entry: “adjustment”, “miscellaneous recovery” or “salary correction”.

There is no explanation from HR, and you are unsure whether the deduction is justified.

A deduction appearing on a salary slip does not automatically make it lawful. Before accepting it, ask what the amount relates to, how it was calculated and what legal basis supports it.

Which Salary Deductions Are Permitted?

Section 18 of the Code on Wages, 2019 permits specified deductions, including statutory contributions, absence from duty, recovery of advances or overpayments, and certain fines or recoveries for damage or loss.

Each category has conditions. An internal company policy alone does not establish that every recovery is lawful.

Under Section 18(3), total authorised deductions generally cannot exceed 50% of wages for the wage period, subject to other applicable laws. This limit does not give an employer permission to make arbitrary deductions below 50%.

Can an Employer Deduct Salary for Absence or Alleged Loss?

An absence deduction ordinarily must be proportionate to the period of absence.

For damage or loss, the employer must establish the required connection to the employee’s neglect or default, provide an opportunity to respond, and observe the statutory limits.

If the employer alleges that you damaged equipment or caused a financial loss, request the supporting records and calculation. Do not assume that a verbal allegation settles the issue.

What Should You Ask HR?

Send a written request asking:

1. What is the reason for the deduction?
2. Which legal provision authorises it?
3. How was the amount calculated?
4. Which attendance records, transaction records or other documents support it?
5. Will a corrected payslip and refund be issued if the deduction is incorrect?

Identify the salary month and disputed amount clearly. Attach the relevant payslip so that payroll can locate the entry.

What Should You Do Next?

Check your records. Compare the payslip with your appointment letter, salary revisions, attendance records and bank credit. Separate normal statutory deductions from the disputed recovery.

Raise the issue in writing. Email HR or payroll rather than relying only on a phone call. Keep a copy of the query and any reply.

Request a reasonable response period. You may ask for a response within seven working days. This is a suggested follow-up period, not a universal statutory deadline.

Escalate an unresolved dispute. If the response does not explain the deduction, submit a formal written grievance identifying the disputed amount and requesting correction.

Approach the appropriate authority. Depending on the establishment and jurisdiction, the matter may be taken to the relevant Labour Department, Inspector-cum-Facilitator or wage-claims authority. Check the appropriate forum before filing.

Can You Seek Recovery?

Section 45 provides a claims mechanism. Applications ordinarily have a three-year limitation period, with delayed filing possible on sufficient cause. The authority may award compensation of up to ten times the determined claim; this is discretionary, not automatic.

Documents You Should Preserve

• Appointment letter and salary revision letters.
• Payslips and corresponding bank statements.
• Attendance records and leave approvals.
• Emails about the deduction.
• Relevant recovery policies or advance records.
• Your written complaint and the employer’s response.

Keep the documents in date order and prepare a short calculation showing the amount you dispute.

Frequently Asked Questions

Does “miscellaneous adjustment” explain a deduction?
No. Ask what transaction it relates to and request the supporting calculation.

Should I resign before challenging it?
No. You can raise the issue while continuing in employment.

What if HR says payroll made a mistake?
Ask for written confirmation of the correction, the repayment date and a revised payslip.

What if the company does not reply?
Follow up in writing and consider approaching the appropriate authority with your records.

Will I automatically receive ten times the deducted amount?
No. Any compensation depends on the authority’s decision and the circumstances.

Need Help Reviewing a Salary Deduction?

The LexSphere can assist with reviewing salary records, preparing a written representation and identifying the appropriate recovery process. Share your payslip, employment documents and relevant correspondence for an assessment.