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New wage rules may lift PF and gratuity but cut take home pay for employees
Economy
Published on 24 April 2026
Half of CTC must become basic, shifting your salary
India’s new Code on Wages requires basic salary to be at least 50% of total CTC. That shift is expected to raise provident fund and gratuity contributions, boosting long-term retirement savings. But employees may see lower take-home pay as employers restructure allowances to meet the rule—effectively making it harder for firms to minimize retirement contributions.
- Basic salary must be at least 50% of total CTC
- PF and gratuity contributions are likely to increase
- Employers may rebalance allowances, reducing take-home pay
- The intent is to stop companies minimizing retirement-linked dues
Read the full story at The Economic Times
This summarization was done by Beige for a story published on 
The Economic Times