The four new labour codes came into force on 21 November 2025, and the change most salaried Indians feel is the 50% basic rule: your basic pay (plus DA) must now be at least half of your total CTC. Because PF is deducted as 12% of basic — matched by your employer — a bigger basic means a bigger PF deduction, a bigger gratuity accrual, and a smaller monthly in-hand salary, even though your CTC has not changed at all.
This calculator shows exactly what that restructuring does to your salary: your current structure and the labour-code structure side by side, the monthly in-hand change, and how much of the “lost” money actually lands in your PF and gratuity instead.
How to Use the New Labour Code Salary Calculator
- Enter your annual CTC.
- Enter your current basic as a percentage of CTC (check your salary slip — 30-40% is typical for pre-code structures).
- Click Compare Old vs New Structure to see the monthly in-hand change, PF change, and gratuity change.
Example: what happens at ₹12 lakh CTC
At ₹12,00,000 CTC with a 35% basic, monthly basic is ₹35,000 and your PF deduction is ₹4,200. Restructured to a 50% basic (₹50,000), the PF deduction rises to ₹6,000 — your in-hand drops by roughly ₹1,800-2,100 a month once the employer PF adjustment inside CTC is counted. In exchange, your combined PF savings grow by about ₹43,000 a year and your gratuity accrual rises by about ₹8,700 a year. The codes shift money from today’s pocket to retirement — whether that is good or bad depends on your cash-flow needs, which is why seeing both numbers matters.
Frequently Asked Questions
Will my in-hand salary decrease because of the new labour codes?
If your basic salary is below 50% of CTC today, yes — restructuring to the wage-code definition raises your PF deduction, which lowers monthly in-hand pay. The money is not lost: it moves into your PF and gratuity. If your basic is already 50% or more, nothing changes.
What is the 50% basic rule in the new labour codes?
The Code on Wages defines "wages" so that basic pay (plus DA and retaining allowance) must be at least 50% of total remuneration. Allowances beyond 50% of CTC get added back into wages, which raises the base used for PF and gratuity.
When did the new labour codes come into effect?
All four labour codes were brought into force on 21 November 2025. Companies are restructuring salaries in the appraisal and increment cycles that follow, so most employees see the change in their revised CTC letters.
Does gratuity increase under the new labour codes?
Yes. Gratuity is calculated on "wages" (roughly your basic), so moving basic from 35-40% of CTC to 50% raises gratuity accrual by the same proportion — typically 25-40% more per year of service. Fixed-term employees also become eligible after just one year.
How should I use this calculator for a new job offer?
Enter the offered CTC and ask HR what percentage of CTC the basic is. If it is 50%, the in-hand shown under "New Codes" is what you should expect; comparing offers on CTC alone is misleading once PF is deducted on a bigger basic.