Loading page
All-in-one HR platform · v2.0
14-day free trial · No credit cardhello@HrMagix.com
All-in-one HR platform · v2.0
14-day free trial · No credit cardhello@HrMagix.com
The Code on Wages brings minimum wages, payment of wages, bonus and equal pay under one statute, and gives them a common definition of wages that payroll teams need to understand.
Check before you rely on thisCheck the current implementation status of the Code on Wages, the central and state rules in force for your establishment, the add-back limit on excluded components, the floor wage, payment time limits and any transition provisions.
01
The Code on Wages 2019 consolidates four earlier central laws: the Payment of Wages Act 1936, the Minimum Wages Act 1948, the Payment of Bonus Act 1965 and the Equal Remuneration Act 1976. It deals with how much people must be paid at minimum, when and how wages are paid, what may be deducted, statutory bonus, and equal pay without discrimination on grounds of gender.
Its practical significance for payroll is a single definition of wages that the other labour codes also draw on.
02
Unlike some of the laws it replaces, the Code is framed to apply minimum wage and timely payment provisions to employees broadly, not only to listed employments or to wages below a ceiling. Bonus provisions keep their own eligibility conditions. Check the Code and its rules for the exact scope that applies to your establishment.
03
The Code defines wages to include basic pay, dearness allowance and retaining allowance, and lists components that are excluded, such as certain allowances, the employer's contributions to PF and pension, gratuity and bonus. It then limits how much of total remuneration can sit in the excluded components: amounts above the limit are added back into wages.
Because PF, gratuity and other contributions follow the definition of wages, a salary structure with a very low basic and large allowances may produce a higher wage base under the Code than under the old laws.
Watch for itThe Code sets the add-back at half of total remuneration (s.2(y)). How it interacts with each statute's own wage base should be checked against the rules in force before restructuring salaries.
04
05
| Term | What it means |
|---|---|
| Wages | The common definition used for statutory calculations, with listed inclusions and exclusions |
| Floor wage | A central baseline below which state minimum wages should not be fixed |
| Appropriate government | The central or state government that fixes minimum wages for an employment |
| Wage period | The period for which wages are paid: daily, weekly, fortnightly or monthly |
06
The four labour codes, passed by Parliament in 2019 and 2020, came into force on 21 November 2025. Final central rules under all four codes were notified on 8 May 2026, and each state frames its own rules, some of which are still in draft. During the transition, the relevant provisions of the earlier Acts and their rules continue to apply, so check which rules govern your establishment in each state.
Until the Code's provisions and the matching state rules apply to you, the older Acts and their rules may still govern parts of your payroll.
Not directly; PF is governed by social security law. But the Code's definition of wages is used across the codes, so a structure with a low basic may face a higher base for contributions. Check the current position before changing structures.
It provides for a floor wage set by the central government. Actual minimum wages are fixed by the appropriate government and vary by state, employment and skill level.
Its substance carries into the Code, in force since 21 November 2025. Where the rules a provision needs are not yet final in your state, the earlier Act's rules continue during the transition.
14-day free trial · Full access to all 12 modules · Zero implementation fee · Cancel anytime