What do the new labour codes change for my own PF and gratuity as a salaried founder?
If you draw a salary from your own company, the codes reach you the way they reach your team. Since 21 November 2025 'wages' (basic pay, dearness allowance and retaining allowance) must be at least half of your total pay, and allowances above that are counted back in, so a salary built on a thin basic and large allowances now carries a larger base for provident fund and gratuity. That usually trims monthly take-home and adds to retirement savings. A fixed-term employee now earns gratuity after one year rather than five, and every employee is owed an appointment letter. Employer PF and NPS contributions stay tax free up to ₹7.5 lakh a year in total. Whether a founder who is also a director counts as an employee for gratuity and PF depends on how the appointment is written, and states were still notifying their own rules through 2026, so restructure your own pay, and your team's, with a CA and check your state's rules.
Go deeper
3 resources, 3 India-specific, 2 link-checked.
📄 Article
✓ Link checkedIndiaFreeBeginner
A plain explainer of how the labour codes' definition of wages changes a salary's structure, take-home pay, PF and tax.
The India detail on NPS: the equity option, the tax benefits, and the withdrawal lock ins, so you know exactly what you are tying up before you commit.
A no-nonsense, ad-light India personal-finance site: plain math and free calculators for emergency funds, goals, and asset allocation, with no product to sell you.
