Wage share
Basic and DA set for the codes.
All payroll & labour compliance services
Payroll & Labour Compliance
Salary Structuring and Tax-Efficient CTC
FinAura designs salary structures that work under both the labour codes and income tax: the wage share that the codes now expect, allowances and reimbursements that are tax-efficient for employees under the regime they choose, and employer contributions planned so the total cost to company is what you intend.
- Chartered Accountant-led
- Bangalore and across India
- Reply within one business day
What is covered
What Salary Structuring and Tax-Efficient CTC Covers
A structure that is legal, efficient and clear.
Allowances
Chosen for tax and purpose.
Reimbursements
Against bills, with a policy.
Employer contributions
PF, gratuity and insurance planned.
Tax regime
Old and new regimes compared.
Offer letters
CTC explained clearly.
How the month runs
How It Works
Review, model, decide, roll out.
Step 1
Review
- Current structures
- Grades
- Policies
Step 2
Model
- Codes impact
- Tax impact
- Cost to company
Step 3
Decide
- Template agreed
- Grade bands
- Exceptions
Step 4
Roll out
- Letters
- Payroll updated
- Employee FAQs
Your part
What We Need From You
- 01Current salary structures
- 02Grades and headcount
- 03Budget for salary cost
- 04Benefits you want to offer
Our part
What You Get
- A compliant structure template
- Take-home and cost modelled
- Letters and FAQs for employees
- Payroll set up to match
A common question
How do the codes and income tax pull against each other?
Income tax rewards some allowances and reimbursements, especially under the old regime, while the labour codes count allowances above half of pay as wages for PF and gratuity.
A good structure balances the two for your workforce, knowing that many employees now choose the new tax regime where most exemptions do not apply.
See labour codes complianceStructureCost and take-home
TaxRegime and allowances
CodesWage share
Who it is for
Who It Is For
Companies setting up grades
First proper structure.
Employers revising for the codes
Since November 2025.
Startups hiring senior staff
Offers that compete.
HR teams
Explaining CTC to employees.
The rules, in plain English
What the Law Says
Code 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.inIncome-tax law
Tax on salaries
Employers deduct tax from salaries each month on the employee's estimated income for the year, deposit it, file quarterly statements and issue an annual certificate (Form 16, or Form 130 from tax year 2026-27).
Official source: incometax.gov.inThis is general information, not advice for your situation; we confirm what applies to you before any work starts.
Questions we get asked
Salary Structuring and Tax-Efficient CTC: Questions, Answered
What is a tax-efficient salary structure?
One where components such as reimbursements and certain allowances reduce tax for employees within the law, while respecting the labour codes' wage share.
Does the new tax regime make allowances pointless?
Many exemptions do not apply under the new regime, so the benefit depends on which regime each employee chooses. We model both.
Can we change existing employees' structures?
Yes, with care: changes should not reduce what was agreed without consent. We help plan and communicate the change.
Do you write offer letters?
Yes, with the CTC broken down clearly, through our policies and documentation service.
Often Taken Together
All 11 Payroll & Labour Compliance services01Payroll & Labour ComplianceLabour Codes ComplianceSalary structures and policies reviewed against the labour codes, so wages, contributions and records are set up correctly.02Payroll & Labour ComplianceForm 16 and Employee Tax DeclarationsInvestment declarations collected and verified, TDS computed monthly, and Form 16 (Form 130 from tax year 2026-27) issued to every employee.03Systems & ControlsPolicies & DocumentationFinance and HR policies, employee handbooks, SOPs and business documentation.04Tax & ComplianceTaxationGST, income tax, TDS, tax planning and notice replies, from reconciled data.