The provisions regarding authorized deductions from wages under the section 7 to 13 of the payment of wages act, 1936

1. AUTHORISED DEDUCTIONS FROM
WAGES UNDER THE PAYMENT OF
WAGES ACT, 1936
PRESENTED BY:
ANAND SARAN
142005

2. OBJECT OF THE ACT
• To avoid unnecessary delay in the payment of wages.
• To prevent unauthorized deductions from wages.

3. WAGES [SECTION 2(6)]
Wages means all remuneration (whether by way of
salary, allowances or otherwise) expressed in
terms of money or capable of being so expressed
which would if the terms of employment express
or implied were fulfilled, be payable to a person
employed in respect of his employment or of work
done in such employment .

4. WAGES
Wage includes any remuneration:-
•Payable under any award or settlement between the
parties or order of a Court;
•Over-time work or holiday or any leave period;
•Any additional remuneration under the terms of
employment.
Wage does not include any bonus, pension fund or
provident fund, travelling allowance and any gratuity.

5. DEDUCTIONS FROM WAGES (SECTION 7 TO 13)
• The wages of an employed person shall be paid
to him without deductions of any kind except
those authorised by or under this Act.
• Deductions from the wages of an employed
person shall be made only in accordance with
the provisions of this Act.

6. DEDUCTIONS FROM WAGES
• Deductions for fines
• Deductions for absence from duty
• Deductions for damage or loss
• Deductions for services
• Deductions for recovery of advances
• Deductions for recovery of loans
• Deductions for payments to co-operative
societies and insurance schemes
• Other deductions

7. DEDUCTIONS FOR FINES (SECTION 8)
• No fine shall be imposed on any employed
person in respect of such acts and omissions on
his part as the employer may have specified by
notice.
• A notice specifying such acts and omissions shall
be exhibited in the prescribed manner on the
premises in which the employment is carried
out.
• No fine shall be imposed on any employed
person until he has been given an opportunity of
showing cause against the fine.

8. Contd.
• The total amount of fine which may be imposed
in any one wage-period on any employed person
shall not exceed an amount equal to three per
cent of the wages payable to him in respect of
that wage-period.
• Every fine shall be deemed to have been
imposed on the day of the act or omission in
respect of which it was imposed.
• All fines and all realisations thereof shall be
recorded in a register to be kept by the person
responsible for the payment of wages.

9. DEDUCTION FOR ABSENCE FROM DUTIES FOR
UNAUTHORISED ABSENCE (SECTION 9)
• Deductions may be made under clause (b) of sub
section (2) of section 7 only on account of the
absence of an employed person from the place or
places where by the terms of his employment, he
is required to work
• The ratio between the amount of deduction and
the wages payable shall not exceed the ratio
between the period of absence and the total
period within such wage period

10. DEDUCTION FOR DAMAGE OR LOSS [SECTION
7(2)]
• Deductions for damage to or loss of goods
expressly entrusted to the employed person for
custody or for loss of money for which he is
required to account (C)
• Acceptance by the employed person of
counterfeit or base coins or mutilated or forged
currency notes(M)
• Failure of the employed person to invoice to bill
to collect or to account for the appropriate
charges due to that administration (N)
• Any rebates or refunds incorrectly granted by
the employed person (O)

11. DEDUCTIONS FOR DAMAGE OR LOSS
(SECTION 10)
• The deduction shall not exceed the amount of
the damage or loss caused to the employer.
• A deduction shall not be made until the
employed person has been given an opportunity
of showing cause against the deduction.
• All such deductions and all realisations thereof
shall be recorded in a register to be kept by the
person responsible for the payment of wages.

12. DEDUCTION FOR SERVICES [SECTION 7(2)]
• Deductions for house-accommodation supplied
by the employer.
• Deductions for such amenities services supplied
by the employer.
• Deductions shall not be made from the wages,
unless such services have been accepted by the
employed person under the terms of
employment or otherwise (Section 11)

13. DEDUCTION FOR RECOVERY OF
ADVANCE [SECTION 7(2)(F)]
Deductions for recovery of advances of whatever
nature (including advances for travelling
allowance or conveyance allowance) and the
interest due in respect thereof or for adjustment of
over-payments of wages.

14. DEDUCTIONS FOR RECOVERY OF LOANS
• Deductions for recovery of loans granted for
house-building or other purposes approved by
the State Government and the interest due in
respect thereof. [Section 7(2)(fff)]
• Deductions shall be subject to any rules made by
the State Government regulating the extent to
which such loans may be granted and the rate of
interest payable thereon.(Section 12-A)

15. DEDUCTIONS FOR PAYMENTS TO CO-OPERATIVE
SOCIETIES AND INSURANCE SCHEMES
• Deductions for payments to co-operative
societies approved by the State Government or
to a scheme of insurance maintained by the
Indian Post Office [Section 7(2)(j)]
• Deductions made with the written authorisation
of the person employed for payment of any
premium on his life insurance policy to the Life
Insurance Corporation Act of India or for the
purchase of securities of the Government of
India or for being deposited in any Post Office
Saving Bank. [Section 7(2)(k)]

16. OTHER DEDUCTIONS [SECTION 7(2)]
• Deductions of income-tax payable by the
employed person. (g)
• Deductions required to be made by order of a
court or other authority .(h)
• Deductions for subscriptions to and for
repayment of advances from any provident fund
to which the Provident Funds Act 1952 applies or
any recognised provident funds or any provident
fund approved by the State Government .(i)

17. Contd.
• Deductions for payment of insurance premium
on Fidelity Guarantee Bonds.(l)
• Deductions made with the written authorisation
of the employed person for contribution to the
Prime Minister's National Relief Fund.(p)
• Deductions for contributions to any insurance
scheme framed by the Central Government .(q)

18. LIMIT ON DEDUCTIONS [SECTION 7(3)]
• In cases where such deductions are wholly or
partly made for payments to co-operative
societies under clause (j) of sub-section (2)
seventy-five per cent of such wages.
• In any other case fifty per cent of such wages.
The excess may be recovered in such manner as
may be prescribed.