India's new labour codes, which came into effect on November 21, 2025, introduce significant changes to salary structures for millions of employees. Central to these changes is the 50% basic pay rule, which mandates that basic pay, dearness allowance, and retaining allowance must comprise at least 50% of total remuneration. This reform aims to enhance social security benefits but may impact employees' monthly in-hand salaries. Historically, many companies maintained basic pay at 30-40% of total cost to company (CTC) to optimize tax efficiency. With the new rule, employers are expected to increase the basic pay component while reducing allowances, leading to higher statutory deductions for provident funds and gratuity. While this may reduce take-home pay, it also strengthens long-term retirement savings and social security coverage. The tax implications of these changes will vary based on whether employees opt for the old or new tax regime, with the latter likely resulting in more noticeable reductions in in-hand salary due to fewer exemptions. As companies adjust their salary structures, employees should prepare for these changes in their compensation.