Wage definition
Allowances above half of pay counted.
All payroll & labour compliance services
Payroll & Labour Compliance
Labour Codes Compliance
The four labour codes came into force on 21 November 2025 and replaced 29 central labour laws. FinAura reviews your salary structures, contributions, gratuity provisions, leave, working hours and records against the codes and your state's rules, shows what changes and what it costs, and puts the changes into payroll.
- Chartered Accountant-led
- Bangalore and across India
- Reply within one business day
What is covered
What Labour Codes Compliance Covers
What the codes change for you, and the fix.
Contributions
PF and ESI on the new wages.
Gratuity
Liability recomputed, including fixed-term staff.
Leave and hours
Policies checked against the codes.
Final dues
Paid within two working days.
Registers and returns
Under the new forms.
How the month runs
How It Works
Review, cost, change, keep current.
Step 1
Review
- Salary structures
- Policies
- Registrations
Step 2
Cost
- Contribution impact
- Gratuity impact
- Options
Step 3
Change
- Structures revised
- Payroll updated
- Letters issued
Step 4
Keep current
- State rules tracked
- Circulars applied
- Annual review
Your part
What We Need From You
- 01Salary structures and CTC breakdowns
- 02HR policies
- 03Headcount by state and type
- 04Current registrations
Our part
What You Get
- A clear list of what changes
- The cost of each change
- Revised structures in payroll
- Updates as state rules arrive
A common question
What do the labour codes mean for an employer?
The biggest practical change is the single definition of wages: allowances above half of total pay are added back, so PF, ESI, gratuity and bonus may be computed on more. Fixed-term employees also qualify for gratuity sooner, and final dues must be paid within two working days of exit.
Central rules were notified in 2026 and states are notifying theirs, so some details still vary. We review against what is in force for your states.
See salary structuringPayrollChanges applied
ReviewStructures and policies
CodesWages, social security, IR, OSH
Who it is for
Who It Is For
Employers with low basic pay
Structures hit by the wage definition.
Companies with fixed-term staff
Gratuity now applies.
Multi-state employers
Different state rules.
HR teams
Needing a clear checklist.
The rules, in plain English
What the Law Says
Labour codes
In force from 21 November 2025
Four labour codes replaced 29 central labour laws, including the PF, ESI, gratuity, bonus, minimum wages and contract labour Acts. Central rules were notified in 2026; state rules are still being notified.
Official source: labour.gov.inCode on Wages, 2019
Definition of wages
Wages mean basic pay, dearness allowance and retaining allowance. Excluded allowances such as HRA and conveyance above half of total pay are added back to wages, which affects PF, ESI, gratuity and bonus.
Official source: labour.gov.inCode on Social Security, 2020
PF, ESI and gratuity
Provident fund, employees' state insurance, gratuity and maternity benefit now sit under one code. The EPF and ESI schemes continue, run by EPFO and ESIC.
Official source: labour.gov.inCode on Wages, 2019
Section 17(2)
When an employee resigns, is removed or is retrenched, the wages due are paid within two working days.
Official source: labour.gov.inThis is general information, not advice for your situation; we confirm what applies to you before any work starts.
Questions we get asked
Labour Codes Compliance: Questions, Answered
When did the labour codes come into force?
On 21 November 2025. Central rules followed in 2026, and states are notifying their own rules.
Do we have to change salary structures?
If allowances are more than half of total pay, the excess counts as wages for PF, gratuity and other benefits. Many companies are revising structures; we show the cost of each option.
Does the 50% rule increase take-home pay or cost?
It usually increases contributions and gratuity, which raises the employer's cost and can reduce take-home pay unless the CTC is restructured.
Which old laws did the codes replace?
Among others, the PF, ESI, gratuity, maternity benefit, bonus, minimum wages, payment of wages and contract labour Acts.
Often Taken Together
All 11 Payroll & Labour Compliance services01Payroll & Labour ComplianceSalary Structuring and Tax-Efficient CTCSalary components designed so employees keep more after tax and the company stays within the rules.02Payroll & Labour ComplianceGratuity, Bonus and Leave EncashmentStatutory entitlements computed, provided for in the books and paid when due.03Payroll & Labour ComplianceFull and Final SettlementsExit dues, notice period recovery, leave encashment and gratuity computed and paid correctly when someone leaves.04Systems & ControlsPolicies & DocumentationFinance and HR policies, employee handbooks, SOPs and business documentation.05Systems & ControlsInternal Audit & ControlsInternal audit, controls design and testing, SOP and process implementation.