What is Deduction ?
Deductions refer to amounts subtracted from an employee's gross salary or wages. These may include:
Statutory Deductions: Legally mandated, such as taxes, social security, provident fund, or health insurance.
Voluntary Deduction: Chosen by employees, like contributions to retirement plans, charitable donations, or additional insurance.
Company-Specific Deductions: Includes loan repayments, advances, or penalties for specific violations.
Deductions ensure compliance with legal obligations, personal financial contributions, and company policies while determining an employee's net pay.