Can Employer deduct their contribution from employee salary?

POSTED BY muthukumar ON September 2, 2014 9:13 am COMMENTS (4)

Dear Jago,

I am working in a private college in Tamilnadu. For the past 3 months, our employer is deducting EPF from our salary. They deduct both employee & employer contribution (Rs.780+Rs.885) respectively. Nearly Rs.1665/- is deducted from my salary.

This happens not only to me, but every employee from our organisation. What is the use of deducting EPF from my salary & returning back without interest when i relieve? And also, they didnt get any sign from EPF related form (as 3 months of contribution is over till now).

Also, till now, I get my salary only in cash, from the date of joining. How they will credit my EPF without (Salary Account) bank account?

Is any rule that, employer can deduct their contribution from employee salary? Is there any idea to take legal action? What kind of action can be taken?

Thansk & Regards,


4 replies on this article “Can Employer deduct their contribution from employee salary?”

  1. balgates says:

    Dear Muthukumar,
    Looks like your employer has fooled you when they gave you your offer letter.
    In your offer letter, they would have mentioned Rs. xx as your annual salary (CTC).
    But in that, they would have also included the employer contribution amount, i.e., Rs. 885 * 12 months = 10620.
    Therefore, to find your real CTC, you need to subtract 10620 from the amount mentioned in your offer letter.
    Since the employer is going to pay Rs. 885 to the PF office every month in your account, they mislead you saying it is part of your salary.
    Many reputed companies indulge in such a cheap trick to fool innocent job seekers.
    You dont need to have a bank account for the PF amount to be credited by your employer.
    But, you can ask your employer for your PF account number.
    Using this number, you can verify periodically if the amount is credited to your account. The following page will help you do that.

  2. muthukumar says:

    Thanks for the answer.

    Sir, the problem is, the employer deposit employee money as employer share.
    For ex, Rs. 780 (12%) is employee share.
    Rs. 885 (around 13.5%) should be employer share.

    But, our institution debits Rs.1665/- (780+885) from our salary. while they deposit in EPFO office, they simply lie that, Rs.885 is employer contribution.

    But the truth is, the employee is paying for employer.

    Is any legal action can be taken? if yes, suggest steps to take legal actions.

    Waiting for reply,
    Thanks & Regards,

    1. You cant do anything about it . Its part of the CTC in that case !

  3. NewInvestorHC says:

    EPF is deducted in form of Employer Share and Employee Share. Employer when provides Offer does provide compensation details which is called CTC or Cost To Company. They clearly mention in that whether Employer Share and Employee Share is shown in CTC. Which can clear your query easily.

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