The new labour code in India requires that wages constitute at least 50% of total compensation. However, analysts suggest that companies are unlikely to simply raise basic salaries to meet this requirement. Instead, employers may recalibrate salary structures by reducing allowances and adjusting statutory components, resulting in a stable Cost to Company (CTC) but potentially lower monthly take-home pay due to increased contributions to provident funds (PF) and gratuity. Tax expert CA Chandni Anandan notes that while the basic pay and dearness allowance may not meet the 50% threshold, employers can reclassify some allowances to comply with the new wage definition. This may lead to higher retirement savings but lower in-hand income for employees. As a result, workers should pay closer attention to their basic salary, PF deductions, and overall take-home pay when assessing job offers or salary increments.