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Salary Deduction

A salary deduction is an amount deducted from an employee’s salary for the payment of taxes, social security contributions and other voluntary payments. Salary deductions are classified as statutory and non-statutory deductions.

Statutory Deductions

All payroll-related statutory deductions like EPF, TDS, PT, LWF and ESI are made during the Payroll Processing stage. The company then remits the amount to the respective government agencies. The frequency can vary depending on the type of dues. In most cases, payment of dues is made via challans. After the dues are remitted, a return/report is filed. 

Non-Statutory Deductions

Also called voluntary deductions, non-statutory deductions are made as per the employee’s request. Some common deductions include loan repayment, LOP, personal insurance premium, club contributions and more.

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Professional Tax (PT)

Salary Deduction