ARTICLE · 13 FEBRUARY 2026

"Wages" Redefined: How The Code On Wages Will Impact Salary Structuring

BTG Advaya

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The Code on Wages, 2019 ("Wages Code") represents an important change in India's labour law framework.

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1. Introduction

The Code on Wages, 2019 (“Wages Code”) represents an important change in India's labour law framework. The Wages Code subsumes and consolidates four central wage-related labour laws into one code and provides a uniform definition of “wages.” This change impacts not only compliance with laws but also how organizations design and implement salary structures. In light of this change, employers will now be required to revisit and, where required, restructure their compensation frameworks to align with the revised definition of “wages” under the Wages Code.

2. What Counts as “Wages”?

Prior to the labour codes being brought into effect, different labour laws adopted varying approaches to wage computation for statutory benefits. The Wages Code simplifies this by grouping salary components into three main categories:

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