Labour Codes FAQs

What is the 50% wage rule?

“Wages” under the Codes excludes certain components, such as house rent allowance, conveyance and overtime. If the excluded components together exceed 50% of total remuneration, the excess is added back to wages. Because wages are the base for provident fund, gratuity and other benefits, salary structures with a low basic pay may cost employers more.

General information on Indian law, not legal advice. For advice on your situation, contact the firm.

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