Clarification Needed on Salary Distribution: Basic Salary, Gross Salary, and CTC under New Labour Code

I need help to understand certain aspects of the new labour code, especially in relation to the salary structure.

1. According to the new labour code, our basic salary should account for 50% of the total. I was wondering if it would be feasible to structure it in such a way that the basic salary is 35%, Dearness Allowance (DA) is 10%, and the retaining allowance is 5%, cumulatively making up 50%?

2. To fulfil this 50% requirement, should we consider the gross salary or the Cost to Company (CTC)? The CTC includes all employer contributions like Provident Fund (PF), Employees\' State Insurance Corporation (ESIC), insurance benefits provided by the employer, and any other employer-provided benefits. Therefore, calculating 50% of the basic salary from the CTC would yield different results.

Any suggestions or solutions on this subject would be greatly appreciated.

Thank you,
Prasoona Subash

Answer to question no 1 is possible.

Answer to question no 2 is CTC which is Total Remuneration (TR) and is monthly gross plus employer portion of PF plus Annual bonus divided by 12 plus any other yearly contribution divided by 12 but not the ESIC employer contribution, contribution to any insurance etc. not payable to employee.

S K Bandyopadhyay ( WB, Howrah)
CEO
USD HR Solutions
98310 81531

For restructuring the wage as per Code on Wages, 2019 we are to go through sec. 2y. We are to consider gross salary & not the CTC. Go through carefully & implement it from 21.11.2025.

R N KHOLA

Please check CiteHR whatsapp to check Govt.of India labour ministry clarification on wages definition.

S K Bandyopadhyay (Howrah, WB)
98310 81531