New labour code salary calculator: the 50% wage rule

Under the Code on Wages, 2019, wages are basic pay, dearness allowance and retaining allowance. If the items the Code leaves out of wages, clauses (a) to (i) of section 2(y), come to more than one-half of all remuneration, the excess is added back to wages. This page does that sum for one month's pay, item by item. PF, gratuity and bonus are worked out on these wages.

Your figures

Is any pay given in kind (food coupons, ration, mobile recharge)?

NoYes

One month's pay

Rupees a month, as on the pay statement. Leave a box blank if nothing is paid under it. Write 1,50,000 or 150000; no ₹ sign.

Wages: s.2(y)(i) to (iii)

Basic pay

s.2(y)(i)

Dearness allowance

s.2(y)(ii)

Retaining allowance

s.2(y)(iii)

Left out of wages, counted in the 50% test: s.2(y)(a) to (i)

House rent allowance

s.2(y)(f)

Conveyance allowance, travel concession

s.2(y)(d)

Overtime allowance

s.2(y)(h); Additional FAQs 1a and 8

Commission

s.2(y), exclusion clause (i)

Employer's PF and pension contribution

s.2(y)(c); Additional FAQ 1b. Enter the contribution actually paid for this month, not the new figure the PF calculator works out.

Statutory bonus paid with the month

s.2(y)(a); Additional FAQ 1b

Value of house, amenities or services; special expenses of the job; pay under an award or settlement

s.2(y)(b), (e), (g)

Other items

Any other allowance, e.g. special allowance

Not named in s.2(y)(a) to (k): the Code's text makes it wages, the FAQ wording puts it in the test. Both are shown.

Gratuity, retrenchment or retirement benefit shown in the pay

s.2(y)(j), (k): never wages. FAQ 7 counts them in total remuneration, Additional FAQ 1b does not. Both are shown.

The rules applied

Wages: Code on Wages, 2019, s.2(y); the same words in the Code on Social Security, 2020, s.2(88). In force from 21 November 2025 (MoLE FAQs 8 and 17; Additional FAQs 6 and 7).
The 50% test: first proviso to s.2(y). Overtime is inside the test (Additional FAQs 1a and 8). Employer PF and pension contributions and statutory bonus count as remuneration (Additional FAQ 1b).
Not wages: annual performance incentives, ESOPs, variable pay and reimbursements (FAQ 3; Additional FAQ 4). Leave encashment is not an allowance (FAQ 5). Leave them out of the boxes.
For equal wages and for payment of wages, items (d), (f), (g) and (h) count as wages (second proviso). The figure here is the first proviso's wages.
Pay in kind (food coupons, ration, mobile recharge: Additional FAQ 18) counts up to 15% of total wages (Explanation). No official text says whether it sits inside the 50% test, so the calculator refuses pay that includes it.

Sources read in the Gazette of India and on labour.gov.in on 6 November 2026. Rules made by States are not covered.

A calculation from the published texts, not legal advice. It does not say that a pay structure complies with the Codes. Check with the rules that apply to your establishment.