{"id":3237,"date":"2026-10-01T17:46:23","date_gmt":"2026-10-01T12:16:23","guid":{"rendered":"https:\/\/khannaandassociates.com\/blog\/?p=3237"},"modified":"2026-10-01T17:46:24","modified_gmt":"2026-10-01T12:16:24","slug":"new-50-wage-definition-2026","status":"publish","type":"post","link":"https:\/\/khannaandassociates.com\/blog\/new-50-wage-definition-2026\/","title":{"rendered":"How the New 50% Wage Definition Affects PF, Gratuity and Bonus Calculations from October 2026"},"content":{"rendered":"\n

India’s payroll landscape is undergoing its most significant transformation in decades. Starting October 2026, the new 50% wage definition<\/strong> under India’s Code on Social Security, 2020 will fundamentally change how employers calculate Provident Fund (PF), Gratuity, and Bonus across every industry, every city, and every employment type in the country. Whether you are an Indian employer in Rajasthan, a multinational company setting up operations in Dehradun or Jaipur, or an NRI professional monitoring your retirement benefits, this regulatory shift affects you directly and immediately.<\/p>\n\n\n\n

The new rule is simple but powerful: allowances in an employee’s salary cannot collectively exceed 50% of total remuneration. This means the basic wage must be at least half of gross pay \u2014 a rule that dismantles years of low-basic, high-allowance salary structuring that artificially suppressed PF and Gratuity contributions.<\/p>\n\n\n\n

As a trusted best law firm in Jaipur<\/a> and one of the top law firms in India, Khanna & Associates is helping businesses, HR teams, and employees restructure for full compliance before the October 2026 deadline.<\/p>\n\n\n\n

For official legislative references, visit the Ministry of Labour & Employment (https:\/\/labour.gov.in\/<\/a>) and the EPFO portal (https:\/\/www.epfindia.gov.in\/<\/a>).<\/p>\n\n\n\n

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