What is Statutory wages (labour codes)?
Short answer
Under the labour codes, wages include basic pay and dearness allowance, and any other allowances above 50% of total pay are added back. So statutory wages are at least 50% of total pay.
Why it matters
- PF, gratuity and leave encashment are calculated on these wages.
- The labour codes came into force on 21 November 2025.
- Allowance-heavy salary structures therefore give higher PF, gratuity and leave encashment than before.
In AdviHR
AdviHR applies the 50% rule to PF, gratuity and leave encashment, and a company can switch it off in settings.
Frequently asked questions
When did the labour codes start?
On 21 November 2025.
Related terms
How sure are we? These figures use the same rules AdviHR payroll applies. We publish what has been checked against an official source and what has not, on the statutory accuracy page.
General information, not legal or tax advice. Confirm against the official notification and your adviser.