Tata Consultancy Services has responded to employee concerns surrounding its revised salary structure, stating that no employee has experienced a reduction in gross or take-home pay following the latest appraisal cycle. The clarification comes after discussions emerged around lower cost-to-company (CTC) figures, revised appraisal outcomes and changes in compensation components.
Questions surfaced after employees noticed differences in salary revision letters issued during the FY26 appraisal process. Several employees reportedly expressed concern over gratuity no longer appearing as part of overall CTC calculations. Others also raised doubts over shifts in variable compensation and revised salary structures that they felt affected monthly payouts.
TCS said the revised framework has been introduced primarily to align compensation with India’s evolving labour regulations. The company stated that the changes are designed to ensure compliance with the upcoming labour codes, create a more uniform wage structure across its India workforce and preserve employee take-home salary while retaining flexibility around tax planning.
A major point of confusion appears to be the treatment of gratuity. Under the revised structure, gratuity calculations are being aligned with provisions under the Code on Social Security, 2020. Unlike earlier practices that linked gratuity largely to basic pay, the new approach uses a broader definition of wages.
Under the revised wage structure, basic salary, city allowance and personal allowance are included within wage calculations. Meanwhile, components such as house rent allowance, conveyance benefits, provident fund contributions, superannuation and statutory bonuses fall outside this definition. Variable pay, insurance premiums and performance incentives are also treated separately.
The company has maintained that comparisons between old and new CTC structures should exclude gratuity to ensure an accurate assessment. The reportedly company said gratuity accruals may actually increase because calculations are now linked to a wider wage base. Employees are expected to receive whichever gratuity option proves more beneficial under either the existing company scheme or the future social-security framework.
The discussion also comes as compensation policies across the IT sector continue to evolve alongside regulatory reforms. Internal policy details suggest performance-linked variable payouts remain connected to office attendance and deployment metrics, reflecting broader changes in how employers are restructuring compensation and workplace expectations.
