New Labour Code Salary Calculator (2026)
The New Labour Code requires your wages (Basic + DA) to be at least 50% of your total remuneration. Enter your CTC and current wages below to see how the rule changes your wages, PF, gratuity base, and approximate take-home — before vs after.
Enter a valid CTC and current wages (0 or more) to see your comparison.
Before (as structured)
- Wages (Basic + DA)
- Employee PF (12%)
- Employer PF (12%)
- Gratuity base
- Approx. take-home
After (new labour code)
- Wages (Basic + DA)
- Employee PF (12%)
- Employer PF (12%)
- Gratuity base
- Approx. take-home
| Before (as structured) | After (new labour code) | |
|---|---|---|
| Wages (Basic + DA) | ||
| Employee PF (12%) | ||
| Employer PF (12%) | ||
| Gratuity base | ||
| Approx. take-home (indicative) |
"Approx. take-home" is CTC minus PF only — it does not account for income tax or other CTC-only components (bonus/gratuity provisioning, insurance, etc.), so treat it as directional, not exact. PF stays flat between "before" and "after" whenever both wage figures are already above the ₹15,000/month PF ceiling.
How to use this calculator
Enter your annual CTC and your current monthly Basic + DA (this is usually shown on your payslip or offer letter as "Basic Salary" plus "Dearness Allowance"). The table updates instantly to show your wages, PF, gratuity base, and approximate take-home both as currently structured and after the new labour code's 50% wage rule is applied.
The formula, explained
Under the Code on Wages, 2019, "wages" means Basic pay + Dearness Allowance + retaining allowance. Allowances excluded from wages — HRA, overtime, bonus, commission, and so on — cannot exceed 50% of your total remuneration. If they do, the excess is added back into wages for statutory purposes. Put simply:
statutory_wages = max(current_wages, 50% × total_remuneration)
PF is then calculated on this wage figure, capped at the statutory ceiling of ₹15,000/month, at 12% each from employee and employer.
Worked example
A ₹10,00,000 annual CTC (₹83,333/month), with Basic + DA structured at 30% of CTC (₹25,000/month):
| Before | After | |
|---|---|---|
| Wages (Basic + DA) | ₹25,000 | ₹41,667 |
| PF wage base (capped at ₹15,000) | ₹15,000 | ₹15,000 |
| Employee / Employer PF | ₹1,800 each | ₹1,800 each |
| Gratuity base | ₹25,000 | ₹41,667 |
Notice PF doesn't change here — both wage figures already sit above the ₹15,000 statutory ceiling, so PF is capped either way. The rule's real, visible effect at this CTC is on the gratuity base, which jumps by two-thirds (₹25,000 → ₹41,667). That higher base carries straight through to a bigger gratuity payout — see the gratuity calculator.
Key rule points
- The four labour codes, including the Code on Wages, 2019, took effect on 21 November 2025.
- Employer PF contribution counts toward total remuneration (the denominator) but is excluded from wages itself.
- PF is always capped at the ₹15,000/month statutory wage ceiling here, unless an employer and employee jointly opt for a higher base — that opt-in isn't modelled in this calculator.
- This calculator does not model income tax. For that, use the Old vs New Tax Regime calculator once it's live.
FAQ
Wages means Basic pay + Dearness Allowance (DA) + retaining allowance. Allowances like HRA, overtime pay, bonus, and commission are excluded from wages, but they cannot exceed 50% of your total remuneration.
If your excluded allowances (HRA, bonus, overtime, etc.) add up to more than 50% of your total remuneration, the excess amount is added back into your wages for statutory purposes. In effect, your wages must be at least 50% of your total remuneration.
Not necessarily. PF is calculated on wages capped at the ₹15,000/month statutory ceiling. If your wages already exceed ₹15,000 before or after the 50% top-up, your PF contribution stays the same — only the wage figure itself changes.
Yes. Gratuity is calculated using your wages (Basic + DA), not your full CTC, and there's no ceiling on this like there is for PF. A higher statutory wage base directly increases your gratuity amount — this is usually the biggest visible impact of the new rule.
The four labour codes — including the Code on Wages, 2019 — took effect on 21 November 2025.
Formula last verified: 11 Aug 2026
Sources: Code on Wages, 2019; EPF & MP Act 1952 / EPFO (PF wage ceiling); Ministry of Labour & Employment FAQ (Mar 2026).
This is an indicative estimate based on the New Labour Code's wage rules as understood at the time of writing. It does not model income tax, the EPS/EPF split, or company-specific pay structures, and the final Central Rules implementing these provisions were not yet notified as of this verification date. Confirm your exact figures with your employer's payroll team or a qualified professional before relying on this for financial decisions.