# New Labour Codes in India: Latest Payroll and Labour Law Changes for Employers Dated India labour law updates and payroll rule changes, including the four new labour codes, that affect companies employing staff in India through Versatile Club's Employer of Record (EOR) service, each linked to its government notification. - Applies to: Companies employing staff in India through Versatile Club's Employer of Record (EOR) service - Status: Live - Verified: 2026-10-29 - Canonical page: https://versatile.club/docs/updates/ You employ people in India, and you need to know which rule changes reach their pay and from what date. India labour law updates through 2025 and 2026, led by the new labour codes, changed how employers pay, deduct and document salaries. The four new labour codes came into force on 21 November 2025, followed by new PF schemes, a higher EPF wage ceiling and a new Income-tax Act. Versatile Club is an India-only Employer of Record (EOR). As the legal employer for the people it hires on your behalf, it handles their PF, TDS and other filings under its own registrations. Each entry below is dated, links its government notification and says in one line what it means for you. ## At a glance {#at-a-glance} | Date | Change | What it means for you | |---|---|---| | **17 September 2026** | [EPF wage ceiling raised to ₹25,000 a month](https://www.labour.gov.in/static/uploads/2026/09/2b0f1dbbd3769fc388416186ec145328.pdf) | Recheck any India cost model built on the earlier ceiling | | **1 July 2026** | [EPF Scheme, 2026 replaces the 1952 Scheme](https://egazette.gov.in/WriteReadData/2026/273957.pdf) | PF for your India staff runs under the new scheme | | **30 June 2026** | [New pension scheme](https://egazette.gov.in/WriteReadData/2026/273951.pdf) and deposit-linked insurance scheme | The schemes that sit beside PF were replaced too | | **29 May 2026** | [Interest on late PF dues set under the Code](https://www.labour.gov.in/static/uploads/2026/06/730db9e9a2b244dba77b741b37fd842d.pdf) | Keep each month's PF deposit record | | **8 May 2026** | [Final central rules under the Labour Codes](https://www.labour.gov.in/static/uploads/2026/05/49aa9b62c2125499c37399b90e969d67.pdf) | The Codes now run on final central procedures | | **1 April 2026** | [Income-tax Act, 2025 in force](https://egazette.gov.in/WriteReadData/2025/265620.pdf) | Salary tax forms have new numbers | | **21 November 2025** | [Four Labour Codes in force](https://egazette.gov.in/WriteReadData/2025/267883.pdf) | Salary structure now shapes the statutory wage base | | **13 November 2025** | [DPDP Rules, 2025 notified](https://www.meity.gov.in/static/uploads/2025/11/53450e6e5dc0bfa85ebd78686cadad39.pdf) | Most duties on employee data start eighteen months after publication | ## Latest India payroll and labour law changes, newest first {#regulatory-updates} ### 17 September 2026: EPF wage ceiling raised to ₹25,000 a month {#update-2026-09-17-epf-wage-ceiling} The Labour Ministry set a new EPF wage ceiling of [₹25,000 a month under S.O. 5109(E)](https://www.labour.gov.in/static/uploads/2026/09/2b0f1dbbd3769fc388416186ec145328.pdf), in force from its publication on 17 September 2026. It supersedes the ceiling notified earlier in 2026 by S.O. 2702(E). **What it means for you:** any India cost model that used the earlier ceiling needs a fresh look. The [Provident Fund page](https://versatile.club/docs/compliance/provident-fund/) covers the rate, the wage base and the monthly proof. ### 1 July 2026: EPF Scheme, 2026 replaces the 1952 Scheme {#update-2026-07-01-epf-scheme} The [EPF Scheme, 2026 supersedes the 1952 Scheme](https://egazette.gov.in/WriteReadData/2026/273957.pdf). It was notified as G.S.R. 525(E) and took effect on Gazette publication. Para 18 sets a 12% employer contribution and an equal employee share, subject to the ceiling. Contributions and the electronic return are [due within fifteen days of the close of every month](https://versatile.club/docs/compliance/compliance-calendar/). **What it means for you:** PF for your India staff now runs under the 2026 Scheme. As your Employer of Record, Versatile Club files it under its own PF registration and sends you the [monthly PF and ESI challan confirmations](https://versatile.club/docs/payroll/monthly-payroll/). ### 30 June 2026: New pension and deposit-linked insurance schemes {#update-2026-06-30-eps-edli} Two schemes linked to PF were replaced in the same round. The [Employees' Pension Scheme, 2026](https://egazette.gov.in/WriteReadData/2026/273951.pdf), under G.S.R. 527(E), supersedes the 1971 family pension scheme and the 1995 pension scheme. The [EDLI Scheme, 2026](https://egazette.gov.in/WriteReadData/2026/273942.pdf), under G.S.R. 526(E), supersedes the 1976 Scheme and sets fifteen-day limits for the monthly employer contribution. **What it means for you:** for people Versatile Club employs as your EOR, these contributions sit under its registrations, not your company's. ### 29 May 2026: Interest on late PF dues set under the Code {#update-2026-05-29-pf-interest} S.O. 2698(E) sets [simple interest at twelve per cent a year](https://www.labour.gov.in/static/uploads/2026/06/730db9e9a2b244dba77b741b37fd842d.pdf) on late dues under the Code on Social Security. It was notified on 29 May 2026 and is deemed effective from 21 November 2025. **What it means for you:** a late deposit costs interest, so each month's deposit record is worth keeping. The EOR's [monthly compliance status](https://versatile.club/docs/payroll/monthly-client-pack/) shows what has been filed and what is coming up. ### 8 May 2026: Final central rules under the Labour Codes {#update-2026-05-08-central-rules} The central government notified final rules under three Codes, each in force on Gazette publication: - the [Code on Wages (Central) Rules, 2026](https://labour.maharashtra.gov.in/sites/default/files/2026-05/code-on-wages-central-rules-2026.pdf), G.S.R. 343(E); - the [Industrial Relations (Central) Rules, 2026](https://labour.maharashtra.gov.in/sites/default/files/2026-05/industrial-relations-central-rules-2026.pdf), G.S.R. 342(E); - the [Social Security (Central) Rules, 2026](https://www.labour.gov.in/static/uploads/2026/05/49aa9b62c2125499c37399b90e969d67.pdf), G.S.R. 344(E). The Social Security rules [supersede older central rules](https://labour.maharashtra.gov.in/sites/default/files/2026-05/social-security-central-rules-2026.pdf), including the ESI Central Rules, 1950 and the Payment of Gratuity Central Rules, 1972. **What it means for you:** the Codes now have final central procedures, but states make their own rules too. Where your employees work still matters, and Versatile Club holds registrations across all 28 states. ### 1 April 2026: Income-tax Act, 2025 and Income-tax Rules, 2026 take effect {#update-2026-04-01-income-tax-act} The Income-tax Act, 2025, Act No. 30 of 2025, says it [shall come into force on 1 April 2026](https://egazette.gov.in/WriteReadData/2025/265620.pdf). The Income Tax Department's [release on the new Act](https://www.incometaxindia.gov.in/documents/d/guest/press-release-income-tax-act-2025-comes-into-force-from-01-april-2026-pdf) confirms that date, and the implementing Rules were notified on 20 March 2026. The [Income-tax Rules, 2026](https://www.incometax.gov.in/iec/foportal/sites/default/files/2026-03/En-Notified-IT-Rules-2026-20-03-2026.pdf), Notification No. 22/2026, took effect the same day. The [salary tax forms were renumbered](https://versatile.club/docs/tax/). The annual salary certificate is now [Form 130, issued by 15 June after the tax year](https://www.incometax.gov.in/iec/foportal/sites/default/files/2026-03/En-Notified-IT-Rules-2026-20-03-2026.pdf), in place of Form 16. **What it means for you:** your employees' tax documents carry new form numbers. The [list of documents you and your employees receive](https://versatile.club/docs/reference/documents-you-receive/) maps each old form to its new one. ### 21 November 2025: The four Labour Codes come into force {#update-2025-11-21-labour-codes} The four Labour Codes came into force on 21 November 2025. The Gazette notifications are the [Code on Wages, under S.O. 5322(E)](https://www.labour.gov.in/static/uploads/2025/12/0fd090d29a4576739079a7b565c8ca9d.pdf), the [Industrial Relations Code, under S.O. 5320(E)](https://egazette.gov.in/WriteReadData/2025/267883.pdf), the [Code on Social Security, under S.O. 5319(E)](https://egazette.gov.in/WriteReadData/2025/267882.pdf) and the [OSH Code, under S.O. 5321(E)](https://labour.maharashtra.gov.in/sites/default/files/2025-11/implementation-of-labour-codes.pdf). The Social Security notification is read with a [December 2025 corrigendum](https://egazette.gov.in/WriteReadData/2025/268694.pdf). The Code on Wages takes the place of four older Acts, among them the [Payment of Wages Act, 1936 and the Payment of Bonus Act, 1965](https://www.labour.gov.in/static/uploads/2025/06/c328da14bbb15fc4ad571dc33e7a4ab3.pdf). The Labour Ministry says that from 21 November 2025, [the Code's definition of wages applies](https://www.labour.gov.in/static/uploads/2026/03/a4ccf4c6d97c4f1f36a6d83f8c64213d.pdf) for social security. Under the Code on Wages, allowances above one-half of pay are [added back into wages](https://www.labour.gov.in/static/uploads/2025/06/c328da14bbb15fc4ad571dc33e7a4ab3.pdf). **What it means for you:** the salary structure now decides more of the statutory cost. Versatile Club's compliance coverage includes the Labour Code wage rules, and the [CTC offer optimizer](https://versatile.club/tools/india-ctc-offer-optimizer/) lets you test a structure before an offer. ### 13 November 2025: DPDP Rules, 2025 notified, with a phased start {#update-2025-11-13-dpdp-rules} The [Digital Personal Data Protection Rules, 2025](https://www.meity.gov.in/static/uploads/2025/11/53450e6e5dc0bfa85ebd78686cadad39.pdf) were notified as G.S.R. 846(E), dated 13 November 2025. A [separate notification, G.S.R. 843(E)](https://www.meity.gov.in/static/uploads/2025/11/c56ceae6c383460ca69577428d36828b.pdf), brings the DPDP Act, 2023 into force in three phases: - **On Gazette publication:** definitions and the institutional provisions. - **One year after publication, in November 2026:** Consent Manager registration. - **Eighteen months after publication, in May 2027:** the main duties, including [notice, consent, security and breach notification](https://www.meity.gov.in/static/uploads/2025/11/c56ceae6c383460ca69577428d36828b.pdf). **What it means for you:** most duties on your employees' personal data apply from the eighteen-month mark. DPDP Act readiness is one of the EOR's [compliance areas](https://versatile.club/docs/compliance/), so plan your data-sharing terms with Versatile Club before then.
![Schedule 4 of a sample master agreement, the data processing addendum, describing how employee personal data is handled, with a plain-English note beside the clause text.](https://versatile.club/docs/images/screens/company/versatile_company-contracts-msa-schedule-4-data-processing.webp)
Data-sharing terms for employee records sit in the master agreement's data processing schedule. Read it against the DPDP phases above; the agreement shown is a sample with no real client.
## The four new labour codes in India {#four-labour-codes} To see which of the new labour codes touch your payroll, start with what each one covers. Together they replaced a long list of central labour laws with four Acts. Parliament passed them in 2019 and 2020, and all four came into force on 21 November 2025. The table shows what each Code covers and the notification that brought it in: | Code | What it covers | Brought into force by | |---|---|---| | Code on Wages, 2019 | Minimum wages, payment of wages, bonus and equal pay | [S.O. 5322(E), 21 November 2025](https://www.labour.gov.in/static/uploads/2025/12/0fd090d29a4576739079a7b565c8ca9d.pdf) | | Industrial Relations Code, 2020 | Trade unions, conditions of employment and industrial disputes | [S.O. 5320(E), 21 November 2025](https://egazette.gov.in/WriteReadData/2025/267883.pdf) | | Code on Social Security, 2020 | PF, ESI, gratuity, maternity benefit and employee compensation | [S.O. 5319(E), 21 November 2025](https://egazette.gov.in/WriteReadData/2025/267882.pdf) | | Occupational Safety, Health and Working Conditions Code, 2020 | Safety, working hours, leave and appointment letters | [S.O. 5321(E), 21 November 2025](https://labour.maharashtra.gov.in/sites/default/files/2025-11/implementation-of-labour-codes.pdf) | ### The new wage code: Code on Wages, 2019 {#new-wage-code} When people search for the new wage code or the wage code 2019, they mean the Code on Wages, 2019. It was enacted in August 2019 as "[An Act to amend and consolidate the laws relating to wages and bonus](https://www.indiacode.nic.in/indiacode/bitstream/123456789/15793/1/aA2019-29.pdf)". Its main provisions waited until 21 November 2025 to take effect. Its definition of wages counts basic pay, dearness allowance and retaining allowance, and leaves out listed items such as HRA and conveyance. The catch is a cap on those exclusions. If the excluded items exceed half of total pay, the excess is "the amount which exceeds such one-half", and it is added back into wages. Take a sample monthly package of ₹1,00,000: ₹40,000 basic and DA, and ₹60,000 in excluded allowances. Half of the package is ₹50,000, so ₹10,000 is [added back under the Code](https://www.indiacode.nic.in/indiacode/bitstream/123456789/15793/1/aA2019-29.pdf). Wages for statutory purposes become ₹50,000, not ₹40,000. ### What the codes change for payroll {#codes-payroll-changes} Four changes reach every monthly payroll, whoever the employer is: - **Wages paid by the seventh.** Monthly wages are due [before the expiry of the seventh day of the succeeding month](https://www.indiacode.nic.in/indiacode/bitstream/123456789/15793/1/aA2019-29.pdf). - **Final pay in two working days.** When someone resigns or is removed, wages due are [paid within two working days](https://www.labour.gov.in/static/uploads/2025/06/c328da14bbb15fc4ad571dc33e7a4ab3.pdf). - **An appointment letter for everyone.** The OSH Code requires the employer to [issue a letter of appointment to every employee](https://www.labour.gov.in/static/uploads/2025/07/e0971b414d2951d58dd958ecec9c8c09.pdf). - **One wage definition for social security.** The Labour Ministry confirms the [Code's wage definition applies from 21 November 2025](https://www.labour.gov.in/static/uploads/2026/03/a4ccf4c6d97c4f1f36a6d83f8c64213d.pdf). ## How to check which changes reach your employees {#check-your-team} Not every change touches every team. Five questions sort out what matters for yours: 1. **Where do your people work?** Central rules apply everywhere, but state rules on professional tax and shop registration differ. 2. **How is each salary split?** Under the new wage code, the share of basic pay and DA decides the statutory wage base. 3. **Is anyone near the EPF wage ceiling?** The ceiling moved in September 2026, so recheck salaries close to it. 4. **Who is joining or leaving this month?** New joiners need appointment letters, and leavers need final pay within the two-day limit. 5. **What do your employees hold from last year's tax?** Annual tax documents now carry the 2026 form numbers. For people Versatile Club employs as your EOR, the employer side of each answer sits with it. Your side is the cost model and the salary structure you agree for each offer. ## How Versatile Club applies these changes {#how-versatile-applies} As your Employer of Record, Versatile Club employs your staff on its own Indian company. It files their PF, ESI, TDS and professional tax under its own registrations, so a change in the law lands on its filings first. The [Indian entity and its registrations](https://versatile.club/docs/compliance/entity-and-registrations/) shows which company that is. Each month you get a [compliance status report](https://versatile.club/docs/payroll/monthly-client-pack/): what has been filed and what is coming up. That report sits next to the PF and ESI challan confirmations and the TDS deposit receipts in the [monthly payroll records](https://versatile.club/docs/payroll/monthly-payroll/). Its compliance knowledge comes from running Contract-to-Hire across several Indian states.
![Compliance timeline for one sample payroll month showing the invoice, funds received, salaries paid on time with the net total, and the provident fund, professional tax and income tax filings marked as handled.](https://versatile.club/docs/images/screens/company/versatile_company-compliance-month.webp)
Each month's compliance status shows whether a rule change has reached the filings. The month, totals and team shown are sample data, not a client's results.
To check your own readiness for hiring in India, the [India employer compliance scorecard](https://versatile.club/tools/india-employer-compliance-scorecard/) runs through the main obligations. The [India payroll compliance guide](https://versatile.club/blogs/payroll-compliance-in-india/) sets out the wider statutory calendar. ## Where each change is covered {#where-covered} - **PF changes.** The ceiling, the 2026 Scheme and late-payment interest are on the [Provident Fund (EPF) page](https://versatile.club/docs/compliance/provident-fund/). - **Tax form changes.** Form 130 and the other renumbered forms are in the [employee and company documents list](https://versatile.club/docs/reference/documents-you-receive/). - **Joining after a change.** PF, ESI and professional tax start on day 4 of the [five-day onboarding](https://versatile.club/docs/onboarding/onboard-an-employee-in-five-days/). - **Cost after a change.** The [employee cost calculator](https://versatile.club/tools/employee-cost-calculator/) shows the employer side for a salary, and the [salary structure guide](https://versatile.club/india-payroll/compliance-calculation/) explains Basic, DA and allowances. - **Gratuity under the Codes.** The [gratuity calculator](https://versatile.club/tools/gratuity-calculator/) works through the payout formula. - **Take-home tax.** The [India income tax calculator](https://versatile.club/tools/income-tax-calculator/) covers both tax regimes.
![Deductions table from a sample quote listing employee PF, Karnataka professional tax and estimated income tax, then the take-home pay per month and per year.](https://versatile.club/docs/images/screens/company/versatile_company-quote-deductions.webp)
Deductions are where tax and PF changes show up in an employee's take-home pay. The amounts are sample figures for one salary, never a price or a result.
## Limits, what goes wrong and what to check {#limits} - **Government sources only.** An entry appears here only when a government notification or official release backs it. - **Central changes first.** State rules on professional tax, labour welfare funds and shop registration are not in this log yet. - **Dates follow the notification.** Each date is the publication date or the start date the instrument states. - **India only.** Versatile Club operates only in India, so this log covers Indian law. - **Not legal advice.** The entries summarize each change. For your own position, ask your legal adviser. - **A cost model still uses the old EPF ceiling.** The ceiling was raised on 17 September 2026, so salaries near it are costed wrongly, and the gap shows in the employee's cost line on your invoice. Recheck those salaries against the new ceiling. - **A PF deposit is late.** Late dues carry interest under the Code, and contributions and the return are due within fifteen days of the close of each month. Keep each month's deposit record, and under an EOR read the monthly compliance status report to see what has been filed. - **Allowances exceed half of pay.** The excess is added back into wages, so the statutory wage is higher than basic pay and DA alone. The worked example above shows how far the statutory wage moves. Test the salary structure before you make the offer. - **An employee asks for Form 16.** From 1 April 2026 the annual salary certificate is Form 130, issued by 15 June after the tax year. Point the employee to the new form number. - **A leaver or joiner has no paperwork.** Final pay is due within two working days, and every employee needs an appointment letter under the OSH Code. Check both before the month closes. ## Common questions {#common-questions} #### What changed in Indian labour law in 2025 and 2026? {#faq-what-changed} The four Labour Codes came into force on 21 November 2025, and final central rules followed in May 2026. PF moved to a new scheme in July 2026, and its wage ceiling rose in September 2026. #### What are the 4 new labour codes? {#faq-four-codes} The Code on Wages, 2019, the Industrial Relations Code, 2020, the Code on Social Security, 2020 and the Occupational Safety, Health and Working Conditions Code, 2020. Together they replaced many older central labour laws. #### What is the new wage code? {#faq-new-wage-code} It is the Code on Wages, 2019, in force from 21 November 2025. It covers minimum wages, payment of wages, bonus and equal pay, and sets one definition of wages. #### Is the wage code 2019 already in force? {#faq-wage-code-2019} Yes. Parliament passed it in 2019, but its main provisions took effect on 21 November 2025, with final central rules on 8 May 2026. #### What is the EPF wage ceiling now? {#faq-epf-ceiling} [₹25,000 a month](https://www.labour.gov.in/static/uploads/2026/09/2b0f1dbbd3769fc388416186ec145328.pdf), from the notification's publication on 17 September 2026. It replaced the ceiling notified earlier that year. #### When did the Labour Codes come into force? {#faq-labour-codes-date} On 21 November 2025, by four Gazette notifications, one for each Code. Final central rules for three of them followed on 8 May 2026. #### Is Form 16 still used? {#faq-form-16} From 1 April 2026, the annual salary certificate is Form 130 under the Income-tax Rules, 2026. The documents list shows every renamed salary form. #### When does the DPDP Act apply to employee data? {#faq-dpdp} The main duties, such as notice, consent, security and breach notification, apply eighteen months after the notification's publication, in May 2027. A few provisions started earlier. #### Do these changes need action from our company? {#faq-action} Mostly on the cost side. Versatile Club is the employer and files under its own registrations. Your part is to update cost models and salary structures, and the [EOR page for HR leaders](https://versatile.club/for-hr/) covers how the work splits. #### How do we know a change has been applied? {#faq-applied} The EOR's monthly compliance status report shows what has been filed and what is coming up. The PF and ESI challans and TDS receipts arrive with it. #### Does the higher EPF ceiling change our invoice? {#faq-invoice} Your monthly invoice has a cost line for each employee, so any change in statutory cost shows there. Versatile Club's own fee is flat, and the [EOR pricing page](https://versatile.club/pricing/) has the details. #### Who do we ask about a change? {#faq-questions} Write to the Versatile Club team through [its contact page](https://versatile.club/contact-us/), naming the change and the employees it affects. ## Related {#related} - [Versatile Club service documentation](https://versatile.club/docs/): every service component, page by page. - [Onboard an employee in five business days](https://versatile.club/docs/onboarding/onboard-an-employee-in-five-days/): when registrations start for a new hire. - [Test India before committing to a GCC](https://versatile.club/docs/use-cases/test-india-before-a-gcc/): how these rules carry over if you build your own entity later. - [India EOR for finance teams](https://versatile.club/for-finance/): where statutory costs show on the invoice. - [Payroll in India, managed end to end](https://versatile.club/payroll-in-india/): the payroll service that applies these changes. - [India EOR and payroll glossary](https://versatile.club/glossary/): plain definitions of PF, TDS, DPDP and other terms. - [Employer of Record in India playbook](https://versatile.club/blogs/employer-of-record-india-2026-playbook/): the law and cost picture in one guide.