Archive · 15 Jan 2026
India's New Labour Codes May Reduce IT Profits
India has new rules for workers that might make IT companies earn less money.
These rules say companies have to put more money into a special savings account for their employees, called a provident fund.
This could mean employees take home less money each month.
Some companies might choose to put in the smallest amount allowed by law, but this might not help much, especially for new employees.
A survey says most IT companies think these changes will make their worker costs go up by a little bit.
All of this could make IT companies earn up to 20% less money.
India's new labour codes may reduce IT profits by up to 20%.
Take-home pay could decline by 4% to 6% if companies maintain a 12% provident fund contribution.
Companies can opt for the minimum annual PF contribution of Rs 21,600, but this may only partially ease the strain.
Nearly two-thirds of IT firms expect employee costs to increase by up to 5% under the revised norms.
The changes are expected to impact junior staff the most.
- Who
- Indian IT firms and employees
- What
- Implementation of new labour codes
- When
- Not specified
- Where
- India
- Why
- To align with revised labour norms
- Impact on Profits
- Up to 20% reduction
- Take-home Pay Decline
- 4% to 6%
- Provident Fund Contribution
- 12%
- Minimum Annual PF Contribution
- Rs 21,600
- Employee Cost Increase
- Up to 5%
