Will your take-home salary increase with new labour laws?

Indian government is planning to implement four new labour codes that could change how your salary is structured. These laws aim to simplify and modernise labour regulations, but they may also affect your take-home pay and retirement savings.

Under the new rules, your basic salary must be at least 50% of your total cost to company (CTC). This means allowances like house rent, travel, and bonuses will be limited to the remaining 50%. If your basic pay increases, your contributions to Provident Fund (PF) and gratuity will also rise. This is good for long-term savings but may reduce your monthly in-hand salary.

For example, if your current basic pay is low, your PF contribution is also low, giving you more take-home salary. But with the new structure, your PF will increase, and your take-home may decrease slightly.

However, this change ensures better retirement benefits and financial security in the long run. Employers may also need to adjust their salary structures to comply with the new rules.

The government has not yet announced the exact date for implementation, but companies are preparing for the shift. Employees should review their salary slips and understand how these changes may impact their finances.