A free calculator for the 50% wage rule under the labour codes in force since 21 November 2025. Enter an annual CTC and its current Basic percentage, and it shows whether the structure passes the Code on Wages wage definition, the compliant Basic + DA at 50% of CTC, and what compliance costs per employee: the extra employee and employer PF each month, the extra gratuity accrual each year, and the estimated drop in monthly take-home. Toggles cover PF on full Basic versus the 15,000 statutory ceiling, and employer PF inside or outside CTC. Built for payroll teams restructuring salaries for FY 2026-27.

Labour Code CTC Restructure Calculator (Free, India)

A free calculator for the 50% wage rule under the labour codes in force since 21 November 2025. Enter an annual CTC and its current Basic percentage, and it shows whether the structure passes the Code on Wages wage definition, the compliant Basic + DA at 50% of CTC, and what compliance costs per employee: the extra employee and employer PF each month, the extra gratuity accrual each year, and the estimated drop in monthly take-home. Toggles cover PF on full Basic versus the 15,000 statutory ceiling, and employer PF inside or outside CTC. Built for payroll teams restructuring salaries for FY 2026-27.

FAQs

What is the 50% wage rule under the new labour codes?

The Code on Wages defines wages as Basic + DA + retention allowance and caps excluded allowances at 50% of total remuneration. Any excess is added back into wages, so PF, gratuity, bonus and leave encashment are computed on the higher figure. In practice Basic + DA must be at least half of CTC. All four labour codes came into force on 21 November 2025.

Does the 50% rule reduce employee take-home pay?

Usually a little. Raising Basic raises the 12% employee PF deduction, which lowers cash in hand even though the money goes to the employee’s own PF account. If employer PF sits inside a fixed CTC, the higher employer contribution also squeezes the cash components. The calculator shows both effects separately.

Is PF calculated on full Basic or capped at 15,000?

The statutory minimum is 12% of wages up to the 15,000 ceiling (1,800 per month); many employers contribute on full Basic + DA voluntarily. The calculator lets you model either policy. Gratuity has no ceiling and always accrues on full Basic + DA at 15/26 per completed year.