How the labour code calculators work
The four labour codes came into force on 21 November 2025. They define wages once, for all four Codes, and the definition changes PF, gratuity and bonus. These calculators apply the Codes, the Central notifications and the Ministry's FAQs as published, and show the source under every figure.
Steps
- Enter one month's pay item by item, as on the pay statement.
- The calculator adds up all remuneration, takes the items the Code leaves out of wages, and adds any part over one-half back to wages.
- Where the official texts differ for your pay, it shows each reading side by side.
- PF, gratuity and bonus are then worked out on those wages, with the notification that sets each figure.
What the calculators do not cover
- State rules and State notifications: most private establishments follow their State's rules.
- ESIC, leave encashment, overtime pay, take-home pay and income tax.
- The EPF and pension schemes (the split of the employer's share, administration charges, rounding).
- Pay in kind, piece-rated, daily-rated and seasonal pay.
Questions
What is the 50% rule in the new labour code?
Section 2(y) of the Code on Wages: wages are basic pay, dearness allowance and retaining allowance. If the payments left out of wages under clauses (a) to (i), such as HRA, conveyance, overtime, commission and the employer's PF contribution, come to more than one-half of all remuneration, the excess is added back to wages.
Is basic salary now 50% of CTC?
Not in those words. The Code compares the excluded items with all remuneration, not with CTC, and adds the excess to wages. Basic pay itself does not have to change; wages for PF, gratuity and bonus do.
From when does the new definition of wages apply?
From 21 November 2025, the date the Codes came into force (MoLE FAQs 8 and 17; Additional FAQs 6 and 7).
What is the PF wage ceiling now?
₹25,000 a month from 17 September 2026 (S.O. 5109(E)); it was ₹15,000 under S.O. 2702(E) of 29 May 2026.
Do fixed-term employees get gratuity?
Yes, after one year of service under the contract (Industrial Relations Code, s.2(o); Additional FAQs 14 and 19), pro rata (Code on Social Security, s.53(2)).
Who gets statutory bonus?
Under the Central notification S.O. 4711(E), employees drawing wages up to ₹21,000 a month who worked at least 30 days in the accounting year.
Sources
Read on 6 November 2026: the Code on Wages, 2019, the Code on Social Security, 2020 and the Industrial Relations Code, 2020 as published in the Gazette of India; S.O. 2702(E), 4710(E), 4711(E) and 5109(E); the Ministry of Labour and Employment's FAQs of 30.12.2025 and 16.03.2026, which say they are not legal documents and that the Code prevails.