Your home paycheck may drop from April, with new wage rules coming into effect

- All allowances shall not exceed fifty per cent of the total salary

New delhi date. Wednesday 9 December 2020

As the new wage rule will come into force from April 1, 2021, the amount of salary that will be credited to your bank account by March 2020 will not be in April.

The new Wage Code, introduced and approved by Parliament last year, is set to take effect on April 1, 2021. One of the rules is that the allowance received by the employee should not be more than fifty percent of his total salary. There will be a difference in the salary, provident fund and gratuity you will get due to this rule. The amount received now will be less than the salary and other allowances received so far.

At present gratuity is determined on the basis of basic salary. According to the present rule, a basic salary of fifty per cent of the total salary has to be maintained. So the basic salary will increase but the total salary will be reduced. The new system will increase the contribution of both the employee and the company to the provident fund. In other words, employee savings will increase. However, the salary received by the employee will be reduced.