F & ESI Compliance on Salary Adjusted Against Notice Pay Recovery and Determination of Date of Exit

PF/ESI Contributions: Do not apply to notice pay recovery, as this is a compensatory deduction, not earned wages.

Date of Exit: Should be recorded as the actual last day of employment (04 - May - 2026), reflecting the period the employee was on the payroll.

An employee resigned and his last working day was 04-05-2026. The company is recovering notice pay, and therefore no salary is payable to the employee for May 2026.

As notice pay recovery is considered a compensatory deduction and not earned wages, please clarify:

1. What should be reported as PF wages and ESI wages for May 2026?
2. Should PF and ESI contributions be calculated on the salary earned up to the date of exit (01-05-2026 to 04-05-2026), even though the net payable salary is Nil due to notice pay recovery?