TCS deducted 50% variable pay of some employees in April salary, here is why

Employees at TCS are once again discussing salary payouts after many staffers noticed lower-than-expected variable pay in their April salaries. While the company improved quarterly bonus payouts for many mid and senior-level employees, Money Control reported that several workers reportedly received only 50 percent of their eligible variable pay because of office attendance rules linked to the company's work-from-office policy. The company released the quarterly variable allowance (QVA) for the January-March quarter, in which several have received huge pay cuts. People familiar with the matter told the cited source that the company gave an average payout of around 60 to 80 percent to some eligible employees. This is seen as an improvement because, for nearly two years, several employees had reportedly been receiving much lower payouts ranging between 20 and 50 percent. However, not everyone benefited equally this time. Read Full Story Some employees reportedly received only half of their variable pay because their office attendance did not meet the required threshold set by the company. One employee told Moneycontrol that many workers had office attendance close to 60 percent, which reduced their payout eligibility significantly. India Today Tech has reached out to TCS for the same and we will update the article once we receive an official update from the company. TCS has been tightening its work-from-office policy over the past year. Since the first quarter of FY25, the company has linked quarterly variable payouts directly to office attendance. As per the reported policy, employees need at least 85 percent office attendance to qualify for full quarterly variable pay. Workers with attendance between 75 and 85 percent receive around 75 percent of the variable component, while employees with attendance between 60 and 75 percent get only 50 percent of the payout. Those whose attendance falls below 60 percent are reportedly not eligible for quarterly bonuses at all. The stricter attendance-linked payout model has become a major talking point among employees, especially at a time when the IT industry is already facing pressure from slower client spending and delayed projects. TCS deducted pay even after compliance with office attendance, employees claim At the same time, some employees reportedly claimed that even after complying with office attendance rules, their overall variable payouts have remained lower over the past two years because the payouts are also linked to business performance. One employee quoted in the report claimed that TCS had deducted between Rs 4 lakh and Rs 5 lakh cumulatively over the past two years through reduced variable payouts. The reported stated that TCS once revealed that quarterly variable pay depends on the performance of an employee’s business unit, which means payouts can vary across teams and projects. Salary hike rollout at TCS creates fresh confusion The variable pay discussion comes shortly after TCS rolled out annual salary hikes and introduced a revised compensation structure for employees in India. TCS recently started implementing salary increments from April for FY26 and reportedly offered an average hike of around 5 percent. But instead of celebrations, the appraisal cycle appears to have created confusion among several employees. According to the same report, some employees claimed their revised salary structure showed lower monthly earnings despite receiving appraisal letters. A few workers alleged that their salaries had dropped by Rs 3,000 per month, while others said their annual compensation appeared lower by Rs 1,000 to Rs 10,000 on paper. Much of the confusion reportedly revolves around changes made to the company’s Cost to Company (CTC) structure after adjustments linked to India’s new labour codes. Reports suggest TCS removed gratuity from the displayed CTC structure this year, even though gratuity benefits continue internally. Employees are reportedly worried that the reduced-looking CTC figures could affect salary negotiations when switching jobs in the future. TCS, however, defended the revised compensation structure in a statement to India Today Tech. The company said the changes were aimed at complying with new labour codes, standardising salary structures across employees, and protecting take-home pay while allowing flexibility for tax efficiency. The company also said that it has consistently rolled out annual salary increments and remains committed to long-term employee growth. Meanwhile, employees with stronger performance ratings appear to have benefited the most during the latest appraisal cycle. Workers in the top A+ performance band reportedly received salary hikes ranging from 9 to 13 percent, while employees in the A category largely saw hikes between 5 and 9 percent. Employees in lower performance bands reportedly received much smaller increases, with some claiming the revised structure barely improved their salaries. Ends