TCS Salary Hike: Average 5% Increment, Employees Flag ‘Reduced CTC’ After Appraisals

Tata Consultancy Services (TCS) has officially implemented an average salary increment of approximately 5 per cent for its eligible India-based workforce during its latest appraisal cycle. While the IT major is among the first in the technology sector to execute annual wage revisions this year, the rollout has been accompanied by a major restructuring of Cost-to-Company (CTC) frameworks.

The changes, designed to ensure compliance with India's new Labour Codes, have sparked internal discussions among employees regarding shifts in variable pay structures and visible alterations to annual compensation letters. TCS Annual Report FY26: India’s Tech Giant Targets Becoming World’s Largest AI-Led Technology Services Company, Records USD 2.3 Billion in AI Revenue.

Some Employees Are Surprised To See Their CTC Getting Decreased, Says X User

TCS Yearly Increments Are Out

Performance-Based Bell Curve and Band Metrics

TCS handled its latest appraisal cycle using its standard bell-curve evaluation method, sorting employees into designated performance brackets: A+, A, B, and C. Increments and performance-linked payouts varied significantly based on these internal designations. According to employee disclosures, wage adjustments across the performance spectrum settled into the following parameters:

• A+ Band: Top-rated performers received double-digit increments ranging between 9 percent and 13 percent, averaging out at 10 percent.
• A Band: High performers largely secured salary increments between 5 percent and 9 percent, yielding an average increase of over 7 percent.
• B Band: Employees in this mid-tier bracket reported modest adjustments mostly concentrated within the 1 percent to 3.5 percent range, averaging a 3 percent hike.
• C Band: Personnel placed in the lowest tier reported negligible or flat revisions, resulting in a statistically minimal average band increment of 0.3 percent.

CTC Restructuring and the Omission of Gratuity

The core structural change in this cycle involves how annual compensation packages are mathematically presented. Internal sources close to the development clarified that while gross and net in-hand salaries remain protected, TCS has formally removed the gratuity component from the displayed annual CTC figure. To smooth over the broader operational transition necessitated by the new Labour Codes, the IT giant had previously set aside INR 2,128 crore as a one-time financial provision during the October–December quarter.

"Everyone's gross salary is protected and everyone's net salary is protected," a senior corporate source stated, explaining that the firm consciously decided not to display gratuity as part of the overall CTC structure moving forward, even though the company's legal financial contributions to gratuity funds remain active. “If you will take the gratuity out from the previous letter and then compare it, [the] salary has increased," the senior corporate source said.

Employee Concerns Over Take-Home Pay and Performance Pay

Despite corporate assurances of salary protection, multiple employees flagged unexpected discrepancies in their revised packages. Several workers noted that their overall annual CTC calculation on paper dropped by amounts ranging between INR 1,000 and INR 10,000 after the structural adjustments were finalised. "Our annual CTC had fallen by Rs 1,000-Rs 10,000 despite receiving appraisal letters," one employee stated under the condition of anonymity. Another professional assigned to the C3A grade reported an even more direct impact, noting, "Salary actually decreased by Rs 3000".

Aside from job negotiation challenges stemming from lower paper CTCs, personnel expressed concern over the realignment of monthly variable components into quarterly or annual tranches. Furthermore, employees alleged that performance-linked payouts have increasingly been anchored to strict compliance metrics regarding physical office attendance. "Performance pay and bonus both are now calculated on the basis of WFO compliance,” an employee noted. TCS CEO K Krithivasan Salary Rises 6.3% to INR 28.1 Crore in FY26, Annual Report Reveals.

Sector Outlook and Official Response

The calibrated nature of these salary revisions aligns with the broader macroeconomic trends currently impacting India’s technology sector. The domestic IT services industry continues to navigate compressed discretionary spending from global clients, delayed deal execution timelines, and localised operating margin pressures. While TCS, which currently commands a total headcount of 584,519 associates, moved ahead with its standard schedule, peer organisations such as Infosys, HCLTech, and Tech Mahindra have indicated they remain undecided on the timing or quantum of their upcoming compensation cycles.

Addressing employee concerns over the revised framework, an official TCS spokesperson emphasised that the update prioritises standardisation and compliance. “The revised salary structure that the employees have received are guided by three key principles that include, compliance with the new labour codes, standardisation of wage structures across our India workforce, and protection of employees’ take-home salary, while allowing flexibility for tax efficiency," the spokesperson stated. "TCS has consistently maintained a track record of awarding annual increments to its associate’s year-on-year, reinforcing its commitment to employee growth and long-term value creation,” the company added, confirming that the current wage increases remain fully aligned with the projections outlined during their final fourth-quarter earnings conference.

(The above story first appeared on LatestLY on May 19, 2026 07:56 AM IST. For more news and updates on politics, world, sports, entertainment and lifestyle, log on to our website latestly.com).