New Labour Laws: Will Your Take-Home Salary Increase? The Answer Might Surprise You

• New labour codes mandate basic salary to be at least 50% of CTC, consolidating 29 existing laws into four broad codes.
• Previously, basic pay was lower (30-35% of CTC), boosting monthly take-home pay due to lower statutory deductions.
• Higher basic pay under new rules means increased PF contributions, gratuity, and leave encashment, leading to a marginal dip in monthly in-hand salary.
• Reduced tax-free allowances and increased taxable income will also contribute to a slightly higher tax outgo.
• Despite a marginal reduction in monthly take-home pay, the new codes enhance long-term financial security through higher retirement corpus and improved benefits, including health check-ups for employees over 40.

Why It Matters: New labour laws will marginally reduce monthly take-home salary but boost long-term financial security and benefits.