New Labour Code Salary Calculator (2026)

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):

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, professional tax, or other CTC-only components. For a fuller monthly in-hand breakdown, use the Take-Home Salary Calculator; for income tax specifically, use the Old vs New Tax Regime Calculator.

Situational guides

Worked-out detail for the questions people actually ask, using this calculator's own logic:

For employees

• New labour code salary impact — the full guide this calculator is built around.
• The 50% wage rule, explained — what counts as "wages," and why the floor exists.
• Does the new labour code change your take-home salary? — the causal chain, spelled out.
• The new wage code's PF impact — when the 50% floor actually moves your PF deduction, and when it doesn't.
• Basic salary vs CTC under the new labour code — how the wage floor changes this ratio across CTC bands.
• New labour code salary example: ₹10 lakh CTC — one full worked example, before vs after.
• Overtime pay under the new labour code — the rate, and who's actually covered.
• Notice period under the new labour code — retrenchment notice vs resignation notice, not the same rule.

For employers

• How employers must restructure salary — the compliance checklist, and where the real cost usually hides.
• Gratuity liability for fixed-term employees — budgeting for a 1-year gratuity trigger, not a 5-year one.
• Fixed-term employment contract rules — the parity obligation, and the early-termination trap.
• Which labour code obligations apply at what headcount — five different thresholds, not one.
• Payslip and wage payment rules — exact deadlines, and the mandatory wage slip.