Labour
Overtime allowance counts towards the 50% wage-floor calculation under the Code on Wages
- Effective
- Not confirmed on a government page
- Published
- 2026-03-16
- Authority
- Ministry of Labour and Employment, Government of India
In additional FAQs on the Labour Codes issued as on 16 March 2026, the Ministry of Labour and Employment clarified that overtime allowance payment forms part of the 50 percent wage calculation under the Code on Wages, 2019. The FAQ set addresses employer questions on what constitutes 'total remuneration' for applying the 50% wage floor and how statutory components such as PF contributions, statutory bonus, ESI and other retirement benefits are treated.
Open and consequential for payroll: the 50% wage-floor definition drives PF, gratuity and leave encashment cost. This FAQ set builds on an earlier set dated 30 December 2025 on the Ministry's website. Only the overtime point was read in full; the remaining answers should be read in the PDF before restructuring a salary.
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