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HRM Platform
A unified HR management system to manage people, policies, and processes from a single platform.
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Features
    Employee Records
    Maintain centralized employee profiles with personal, job, and document details.
    Organization Structure
    Manage departments, designations, and reporting hierarchies with clarity.
    Onboarding & Offboarding
    Automate joining and exit processes with checklists and approvals.
    Policy Management
    Define and enforce company policies across the organization.
    Document Management
    Securely store and access employee documents anytime.
    Role-Based Access
    Control system access based on roles and responsibilities.
Workforce Management
Track attendance, shifts, and working hours accurately across locations and teams.
View Workforce Tools
Features
    Attendance Tracking
    Monitor daily attendance with real-time logs and summaries.
    Shift & Rotation Management
    Create flexible shifts and rotating schedules effortlessly.
    Overtime Tracking
    Automatically calculate overtime based on company rules.
    Geofence & Location Tracking
    Ensure attendance is marked only from authorized locations.
Leave & Payroll
Simplify leave administration and payroll processing with automation and accuracy.
Explore Payroll
Features
    Leave Management
    Configure leave types, accruals, approvals, and balances.
    Payroll Processing
    Automate salary calculations, deductions, and payouts.
    Payslip Generation
    Generate and distribute digital payslips securely.
    Statutory Compliance
    Ensure PF, ESI, tax, and labor law compliance.
    Compensation Management
    Manage bonuses, incentives, and salary revisions.
Employee Experience
Empower employees and managers with self-service tools and actionable insights.
Enhance Experience
Features
    Employee Self-Service
    Enable employees to apply for leave, view payslips, and update profiles.
    Manager Self-Service
    Approve requests, manage teams, and track performance easily.
    Performance Management
    Set goals, conduct reviews, and track appraisals.
    Reports & Analytics
    Gain insights with dashboards and HR reports.
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ProcessFlow HRM University
Learn HR best practices, product usage, and workforce management skills with guided learning resources.
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Build, customize, and integrate HR workflows using ProcessFlow HRM developer tools.
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    Connect
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    Design
    Design user-friendly HR experiences using recommended UI patterns.
    Horizon Design System
    Use standardized components to design consistent HRM interfaces.
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Products
Industries
Resources
    Products
  • HRM Platform
    • HRM Platform
    A unified HR management system to manage people, policies, and processes from a single platform.
    Explore HR Platform
    Features
      Employee Records
      Maintain centralized employee profiles with personal, job, and document details.
      Organization Structure
      Manage departments, designations, and reporting hierarchies with clarity.
      Onboarding & Offboarding
      Automate joining and exit processes with checklists and approvals.
      Policy Management
      Define and enforce company policies across the organization.
      Document Management
      Securely store and access employee documents anytime.
      Role-Based Access
      Control system access based on roles and responsibilities.
  • Workforce Management
    • Workforce Management
    Track attendance, shifts, and working hours accurately across locations and teams.
    View Workforce Tools
    Features
      Attendance Tracking
      Monitor daily attendance with real-time logs and summaries.
      Shift & Rotation Management
      Create flexible shifts and rotating schedules effortlessly.
      Overtime Tracking
      Automatically calculate overtime based on company rules.
      Geofence & Location Tracking
      Ensure attendance is marked only from authorized locations.
  • Leave & Payroll
    • Leave & Payroll
    Simplify leave administration and payroll processing with automation and accuracy.
    Explore Payroll
    Features
      Leave Management
      Configure leave types, accruals, approvals, and balances.
      Payroll Processing
      Automate salary calculations, deductions, and payouts.
      Payslip Generation
      Generate and distribute digital payslips securely.
      Statutory Compliance
      Ensure PF, ESI, tax, and labor law compliance.
      Compensation Management
      Manage bonuses, incentives, and salary revisions.
  • Employee Experience
    • Employee Experience
    Empower employees and managers with self-service tools and actionable insights.
    Enhance Experience
    Features
      Employee Self-Service
      Enable employees to apply for leave, view payslips, and update profiles.
      Manager Self-Service
      Approve requests, manage teams, and track performance easily.
      Performance Management
      Set goals, conduct reviews, and track appraisals.
      Reports & Analytics
      Gain insights with dashboards and HR reports.
Industries
Browse solutions to help you solve the complex business challenges unique to your industry.
Learn More
    Automotive
    Manage large, shift-based workforces with automated attendance, payroll, and compliance.
    Banking
    Ensure secure employee data management, payroll accuracy, and regulatory compliance.
    Consumer Packaged Goods
    Streamline workforce operations across factories, warehouses, and sales teams.
    Healthcare
    Optimize staff scheduling, attendance, and compliance for uninterrupted patient care.
    Insurance
    Manage distributed teams efficiently with centralized HR records and performance tracking.
    Life Sciences
    Track certifications, training, and workforce compliance across research and operations.
    Nonprofit
    Simplify HR operations while managing employees and volunteers with limited resources.
    National Government
    Maintain secure employee records, standardized processes, and policy-driven HR operations.
    Retail
    Handle high-volume hiring, shifts, and attendance across multiple store locations.
    Technology Providers
    Support fast-growing teams with scalable HR, payroll, and performance management.
    Telecom
    Manage field staff, shifts, and payroll efficiently across large service networks.
    Resources
  • ProcessFlow HRM
    • ProcessFlow HRM University
    Learn HR best practices, product usage, and workforce management skills with guided learning resources.
    Start Resources
      Career journeys
      Explore career paths in HR, payroll, workforce management, and people operations.
      Training and certification
      Get trained and certified on ProcessFlow HRM modules and real-world HR scenarios.
      Expert programs
      Advance your HR expertise with in-depth programs led by industry professionals.
      Resources Help Center
      Access step-by-step guides, FAQs, and troubleshooting resources for HR users.
  • Community
    • Community
    Connect with HR professionals, administrators, and partners to share knowledge and insights.
    View Community
      Product hubs
      Discover documentation, updates, and best practices for every ProcessFlow HRM module.
      ProcessFlow HRM user groups
      Engage with HR peers through local and online user groups.
      Developer forum
      Discuss integrations, automation, and customization with HRM developers.
      Community events
      Attend HR webinars, product demos, and virtual learning sessions.
      Community Central
      Stay updated with announcements, HR trends, and community highlights.
      Join the community
      Become part of the ProcessFlow HRM community and grow together.
  • Developer Resources
    • Developer resources
    Build, customize, and integrate HR workflows using ProcessFlow HRM developer tools.
    Explore Resources
      Learn
      Access tutorials and courses to build custom HR workflows and extensions.
      Reference documentation
      Explore APIs, webhooks, and technical references for HRM integrations.
      Guides
      Follow implementation guides for automating HR processes and integrations.
      Connect
      Collaborate with developers and solution architects in the HR ecosystem.
      Design
      Design user-friendly HR experiences using recommended UI patterns.
      Horizon Design System
      Use standardized components to design consistent HRM interfaces.

The 50% Wage Rule

A practical guide for Indian businesses to understand the Code on Wages, salary structure requirements, payroll impact, and statutory compliance.

The 50% Wage Rule Explained

The Code on Wages introduces a standardized definition of wages for salary calculations. It ensures that the core salary components form at least 50% of an employee's total gross salary.

This rule affects payroll calculations, Provident Fund (PF), gratuity, and other statutory benefits. Organizations should review their salary structures to ensure compliance while maintaining transparent compensation practices.

Quick Overview

What Counts as Wages?

Under the Code on Wages, "wages" generally include:

Most other salary components such as HRA, special allowances, bonus and incentives are treated separately. However, if these allowances exceed the prescribed limits, part of them may be considered wages for statutory purposes.

Understanding the 50% Rule

The law requires wages to constitute at least half of an employee's gross salary. If wages fall below this threshold, part of the excluded allowances is added back while calculating statutory contributions.

Example

Gross Salary: ₹60,000
Basic Pay: ₹15,000

Since ₹15,000 is less than 50% of the gross salary, statutory wage calculations may be based on ₹30,000 instead.

How the 50% Wage Rule Affects Payroll

The 50% Wage Rule directly impacts how statutory contributions are calculated. Even if an employee's basic salary is lower, payroll calculations may use a higher wage value to comply with the Code on Wages.

This mainly affects:

Example

If an employee earns a gross salary of ₹60,000 with only ₹15,000 as basic pay, statutory wage calculations may consider ₹30,000 as wages to satisfy the 50% rule.

Salary Components to Review

Organizations should carefully review their salary structures to ensure they comply with the new wage definition.

Salary Component Included in Wages?
Basic Pay Yes
Dearness Allowance (DA) Yes
Retaining Allowance Yes (if applicable)
House Rent Allowance (HRA) No*
Special Allowance No*
Bonus / Incentives Generally Excluded
Employer PF Contribution Excluded

*If excluded allowances exceed the prescribed limit, a portion may be treated as wages for statutory calculations.

What HR Teams Should Review

HR and Payroll teams should assess existing salary structures before implementing the Code on Wages.

Benefits of Compliance

Following the 50% Wage Rule helps organizations remain compliant while providing greater transparency in employee compensation.

Benefits

Frequently Asked Questions

What is the 50% Wage Rule?

The 50% Wage Rule requires wages (such as Basic Pay, Dearness Allowance, and Retaining Allowance) to make up at least 50% of an employee's gross salary for statutory calculations.

Does this change my salary?

Not necessarily. The rule mainly affects how statutory benefits like Provident Fund and gratuity are calculated. Your overall Cost to Company (CTC) may remain the same.

Which salary components are considered wages?

Basic Pay, Dearness Allowance (DA), and Retaining Allowance are generally included as wages. Other allowances may be partially included if they exceed the prescribed limits.

Why is this rule important?

The rule standardizes salary structures, improves compliance, and ensures employees receive fair statutory benefits.

Who should review salary structures?

HR, Payroll, Finance, and Compliance teams should review salary structures to ensure they comply with the Code on Wages.

HR Compliance Checklist

Use this checklist to prepare your organization for compliance with the 50% Wage Rule.

Conclusion

The 50% Wage Rule is an important step toward creating a more transparent and standardized payroll system in India. While it may require organizations to review salary structures, it also improves statutory compliance and strengthens employee benefits.

Businesses that proactively align their payroll processes with the Code on Wages can reduce compliance risks, improve payroll accuracy, and ensure smoother workforce management in the years ahead.

Simplify Payroll Compliance with ProcessFlow HRM

Automate payroll, statutory compliance, attendance, leave management, and employee records with ProcessFlow HRM.

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