Under the new labour code salary structure, your in-hand salary could look different regardless of whether your annual CTC is Rs 10 lakh, Rs 25 lakh or Rs 50 lakh. That’s because the revised salary structure can increase basic pay, leading to higher deductions such as provident fund contributions and a change in your monthly take-home pay.
The new labour codes (effective November 21, 2025) have led to a growing number of employees across India seeking insight into how their in-hand salary has changed at different CTC levels. Your ‘Wages’ (Basic Pay + DA + Retaining Allowance) is now required to be at least 50% of your total CTC under the new law. This may mean higher provident fund contributions, gratuity benefits and retirement savings, but lower take-home pay.
So, what does a Rs 10 lakh, Rs 25 lakh and Rs 50 lakh CTC actually mean in terms of monthly take-home salary under the new labour codes? Here’s a detailed look at the impact on your take-home salary, deductions and overall salary structure.
In-hand salary impact in different CTC scenarios
The In-Hand Salary as per the New Labour Code would be as follows:
Salary Structure & Tax Calculation
Assumptions:
- Employee NPS Contribution: Assumed at 10% of wages (you can adjust as needed)
- New Tax Regime (FY 2024-25) applied
- No other deductions claimed (80C, 80D, HRA, etc.)
Cost to Company (CTC) Breakup
| Component | CTC: Rs 10,00,000 | CTC: Rs 25,00,000 | CTC: Rs 50,00,000 |
| Basic Pay | 4,00,000 | 10,00,000 | 20,00,000 |
| Dearness Allowance (DA) | 1,00,000 | 2,50,000 | 5,00,000 |
| Total Wages (Basic + DA) | 5,00,000 | 12,50,000 | 25,00,000 |
| Employer PF Contribution (12%) | 60,000 | 1,50,000 | 3,00,000 |
| Employer NPS Contribution (14%) | 70,000 | 1,75,000 | 3,50,000 |
| Gratuity Accrual (4.81%) | 24,050 | 60,125 | 1,20,250 |
| Special Allowance (balancing) | 3,45,950 | 8,64,875 | 17,29,750 |
| Total CTC | 10,00,000 | 25,00,000 | 50,00,000 |
Gross Salary Calculation
| Item | Rs 10,00,000 | Rs 25,00,000 | Rs 50,00,000 |
| Basic Pay | 4,00,000 | 10,00,000 | 20,00,000 |
| Dearness Allowance | 1,00,000 | 2,50,000 | 5,00,000 |
| Special Allowance | 3,45,950 | 8,64,875 | 17,29,750 |
| Gross Salary (A) | 8,45,950 | 21,14,875 | 42,29,750 |
Note: Employer PF (Rs 60,000/Rs 1,50,000/Rs 3,00,000), Employer NPS (Rs 70,000/Rs 1,75,000/Rs 3,50,000), and Gratuity are NOT part of taxable gross salary.
Income Tax Calculation (New Tax Regime FY 2024-25)
| Item | Rs 10,00,000 | Rs 25,00,000 | Rs 50,00,000 |
| Gross Salary | 8,45,950 | 21,14,875 | 42,29,750 |
| Less: Standard Deduction u/s 16(ia) | (75,000) | (75,000) | (75,000) |
| Gross Total Income | 7,70,950 | 20,39,875 | 41,54,750 |
| Less: Deduction u/s 80CCD(2) – Employer NPS | (70,000) | (1,75,000) | (3,50,000) |
| Net Taxable Income | 7,00,950 | 18,64,875 | 38,04,750 |
Tax Calculation (New Tax Regime FY 2024-25)
For CTC Rs 10,00,000:
- Up to Rs 3,00,000: Nil
- Rs 3,00,001 to Rs 7,00,000: 5% = Rs 20,000
- Rs 7,00,001 to Rs 7,00,950: 10% = Rs 95
- Tax before rebate: Rs 20,095
- Less: Rebate u/s 87A (income ≤ Rs 7 lakhs): (Rs 20,095)
- Tax after rebate: Rs 0
- Add: Health & Education Cess @ 4%: Rs 0
- Total Tax Liability: Rs 0
For CTC Rs 25,00,000:
- Up to Rs 3,00,000: Nil
- Rs 3,00,001 to Rs 7,00,000: 5% = Rs 20,000
- Rs 7,00,001 to Rs 10,00,000: 10% = Rs 30,000
- Rs 10,00,001 to Rs 12,00,000: 15% = Rs 30,000
- Rs 12,00,001 to Rs 15,00,000: 20% = Rs 60,000
- Rs 15,00,001 to Rs 18,64,875: 30% = Rs 1,09,463
- Tax before cess: Rs 2,49,463
- Add: Health & Education Cess @ 4%: Rs 9,979
- Total Tax Liability: Rs 2,59,442
For CTC Rs 50,00,000:
- Up to Rs 3,00,000: Nil
- Rs 3,00,001 to Rs 7,00,000: 5% = Rs 20,000
- Rs 7,00,001 to Rs 10,00,000: 10% = Rs 30,000
- Rs 10,00,001 to Rs 12,00,000: 15% = Rs 30,000
- Rs 12,00,001 to Rs 15,00,000: 20% = Rs 60,000
- Rs 15,00,001 to Rs 38,04,750: 30% = Rs 6,91,425
- Tax before cess: Rs 8,31,425
- Add: Health & Education Cess @ 4%: Rs 33,257
- Total Tax Liability: Rs 8,64,682
Net Take-Home Calculation
| Item | Rs 10,00,000 | Rs 25,00,000 | Rs 50,00,000 |
| Gross Salary (monthly paid) | 8,45,950 | 21,14,875 | 42,29,750 |
| Less: Employee PF (12% of wages) | (60,000) | (1,50,000) | (3,00,000) |
| Less: Employee NPS (10% of wages)* | (50,000) | (1,25,000) | (2,50,000) |
| Less: Income Tax (TDS) | 0 | (2,59,442) | (8,64,682) |
| Annual Net Take-Home | 7,35,950 | 15,80,433 | 28,15,068 |
| Monthly Net Take-Home | Rs 61,329 | Rs 1,31,703 | Rs 2,34,589 |
*Employee NPS contribution assumed at 10% – can be adjusted as per actual contribution.
Summary Table
| Particulars | Rs 10,00,000 | Rs 25,00,000 | Rs 50,00,000 |
| Cost to Company (CTC) | 10,00,000 | 25,00,000 | 50,00,000 |
| Gross Salary (In-hand components) | 8,45,950 | 21,14,875 | 42,29,750 |
| Total Deductions | 1,10,000 | 5,34,442 | 14,14,682 |
| Annual Take-Home | 7,35,950 | 15,80,433 | 28,15,068 |
| Monthly Take-Home | Rs 61,329 | Rs 1,31,703 | Rs 2,34,589 |
| Effective Tax Rate | 0% | 10.38% | 17.29% |
Rs 10 lakh CTC: Moderate reduction in monthly take-home salary
The revised salary structure (under the new labour codes) could lead to a significant jump in the share of wages in total compensation for an employee with Rs 10 lakh annual CTC. Though there could be a small dip in the monthly disposable income for these employees, they could benefit from improved retirement savings with higher PF balances and gratuity accumulation.
Rs 25 lakh CTC: Larger PF contributions, stronger retirement corpus
The impact of the new labour codes is more pronounced for those earning Rs 25 lakh annually. While higher deductions can impact monthly liquidity, the revised structure can significantly boost long-term wealth creation by increasing retirement-linked savings and social security benefits.
Rs 50 lakh CTC: Sharp rise in retirement savings under revised structure
The new labour codes have the potential to significantly change compensation structures at the Rs 50 lakh annual CTC level. The new framework might also encourage high-income earners to divert more of their compensation into long-term savings instead of immediate cash flow. But it also adds to the retirement corpus through better PF accumulation and gratuity benefits.
What has changed under the new labour code?
Here is a breakdown of the key changes you need to know:
| Feature | Old Law | New Labour Code (2026) |
| Basic Pay % | No fixed limit (usually 30-40%) | Minimum 50% of CTC |
| Gratuity Eligibility | 5 Years | 1 Year (for Fixed-term) |
| Work Week | 5 or 6 days | 4-Day option allowed |
| Exit Settlement | No strict timeline (often 30+ days) | Mandatory within 48 Hours |
| Gig Workers | Not covered | Universal Social Security |
Why the new labour codes may reduce in-hand salary?
The major reason for lower monthly in-hand salaries under the labour codes is the increase in basic pay. PF contributions are a percentage of basic wages, so a wage increase automatically translates into higher employee and employer contributions. Gratuity payouts are also linked to wages and this may result in companies setting aside more funds for the provision of gratuity. This means less take-home pay right now but better retirement benefits and long-term financial safety.
Employees at the higher CTC levels may experience a more pronounced impact in terms of lower monthly liquidity as PF contributions rise in proportion to wages. However, over a period of time, the larger retirement corpus may help employees build more robust financial stability post-retirement.
Disclaimer: This article is for informational purposes only and does not constitute professional tax advice. Tax laws and regimes are subject to frequent changes by the government. Readers should verify details with official Income Tax Department notifications or consult a Chartered Accountant before making any financial decisions.