Article

Labour codes 2025: how the 50% wage rule resets salaries, tax and retirement savings

Basudha Das · Business Today Free Beginner India

A plain explainer of how the labour codes' definition of wages changes a salary's structure, take-home pay, PF and tax.

  • Basic pay, dearness allowance and retaining allowance must make up at least half of total pay; allowances above that are counted as wages.
  • A larger wage base raises PF and gratuity, which can lower monthly take-home pay.
  • Employer PF and NPS contributions are tax free up to ₹7.5 lakh a year combined.
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Curated reading that points you to the sources, not personalised investment advice.

It answers 2 questions

  1. Should my company put part of my salary into NPS?
  2. What do the new labour codes change for my own PF and gratuity as a salaried founder?

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