🚨Good trend spotting on how and why the new labour code is pinching your monthly take home
A growing number of IT employees are discovering that annual appraisals are no longer translating into meaningful increases in monthly take-home pay, as companies across the sector quietly redraw compensation structures to align with India's new labour-code regime while tightening costs amid a prolonged slowdown.
Several employees claimed their in-hand salaries had either barely increased or, in some cases, fallen despite receiving appraisal letters.
But industry executives, compensation experts, staffing firms and labour lawyers told Moneycontrol that the changes are not isolated to TCS and reflect a broader shift underway across India's IT and corporate sector as firms prepare for implementation of the new labour codes.
The shift is being driven largely by the Code on Wages, which requires wages to constitute at least 50 percent of total remuneration, forcing firms to revisit salary structures that historically relied heavily on allowances and flexible pay components.
Experts said one of the most immediate effects of the restructuring is a rise in statutory-linked components such as provident fund and gratuity calculations, which can reduce monthly take-home salary even if annual compensation remains unchanged.
“This will purely depend on how organizations restructure their employees' salaries,” said Neeti Sharma, CEO of staffing firm TeamLease Services Digital.
“Even when annual CTC stays the same or rises, higher PF contributions, deferred variable pay cycles, and changes in gratuity presentation can reduce monthly in-hand salary,” Sharma said.
“In some cases, gratuity has been removed from displayed CTC altogether; allowances like HRA and personal allowance are being recalibrated,” Mahajan said.
“The result is a CTC that looks structurally different on paper — higher basic pay, higher statutory deductions, and sometimes a lower visible annual number.
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moneycontrol.com/technology/…