Minimum wages move twice a year in most states and almost nobody in a 20-person company is watching. Here is how the revision works and the short routine that keeps you on the right side of it.
Minimum wages in India are set by state (and by the Centre for central-sphere employment), per scheduled employment and skill level, and most states revise the variable dearness allowance component every April and October. The October 2026 round is underway: some states have notified new special allowances or VDA from 1 October, others are due but not yet published. The Code on Wages added a national floor wage below which no state may set its rate, and made the minimum wage the base for other calculations — overtime, the bonus ceiling and leave encashment among them. For a small business, the exposure is rarely a deliberately low salary; it is a salary that was fine in 2023 and has been overtaken by four revisions since. Facts checked 14 October 2026; rates are state-specific, so this guide tells you where to look rather than quoting a number that is wrong for your state.
Each state notifies minimum wages for its list of scheduled employments — shops and commercial establishments, IT and ITeS in some states, security, hospitality, construction, and dozens more — split by skill level (unskilled, semi-skilled, skilled, highly skilled) and often by zone (metro, other cities, rural). The notified rate has a basic component and a variable dearness allowance tied to the state's consumer price index, revised typically twice a year. The result is that a skilled worker in a commercial establishment in one state may have a minimum of ₹14,000 a month and in a neighbouring state ₹18,000.
The Code on Wages, in force since November 2025, keeps this structure, adds a central floor wage, and ties several other calculations to the minimum wage. The overtime rate is at least twice the ordinary rate, which cannot be below minimum; and the bonus calculation ceiling is ₹7,000 or the minimum wage, whichever is higher — so a revision in October can change the bonus you pay in November.
If your staff are in more than one state — common with hybrid and remote teams — the rate that applies is generally the one where the employee works, not where the company is registered.
Pay the shortfall from the effective date as arrears on the next payslip, labelled as such, and raise the salary going forward. If the notification was published after you ran payroll, the arrears are still owed; late publication does not move the effective date. Under the Code on Wages, paying below minimum carries penalties and the employee can claim the difference — with the burden largely on the employer to prove what was paid.
Check the structure, not just the total. A gross of ₹16,000 with basic ₹7,000 and the rest in allowances may fail a ₹14,000 minimum in a state that counts only basic + DA. The 50% rule usually forces this right, but it is worth confirming per employee.
| Set by | State governments per scheduled employment, skill level and zone; the Centre for central-sphere work |
|---|---|
| Revised | VDA/special allowance typically every April and October; basic rate less often |
| Counts towards minimum | Basic + DA in most states; not HRA, conveyance or incentives |
| Floor wage | Central lower bound under the Code on Wages; states set rates at or above it |
| Linked calculations | Overtime ordinary rate; bonus calculation ceiling (₹7,000 or minimum wage, whichever higher) |
| Late notification | Effective date stands; pay the difference as arrears |
| Multi-state staff | Rate of the state where the employee works, generally |
There is no single national figure. Each state notifies minimum wages per scheduled employment, skill level and zone, and revises the dearness component usually in April and October. Find your state labour department's current notification for your industry and skill category; the Code on Wages sets only a national floor below which states cannot go.
Yes, where the establishment falls under a scheduled employment in the state — shops and commercial establishments covers most offices, and several states have IT and ITeS schedules. Minimum wage is not limited to daily-wage or factory work.
In most states, basic pay plus dearness allowance. House rent allowance, conveyance, incentives and overtime generally do not count. A salary whose gross exceeds the minimum can still be non-compliant if basic plus DA falls short.
The new rate applies from its effective date regardless of when it was published. Pay the difference as arrears on the next payslip, labelled as arrears, and move the salary up going forward.
The bonus calculation ceiling under the Code on Wages is ₹7,000 a month or the minimum wage for the scheduled employment, whichever is higher. In most states the minimum wage is the higher figure, so an October revision changes the bonus wages used for the November payment.
Twice a year, after the April and October revisions, plus whenever you hire in a new state or create a new role category. A list of employees within 10% of the applicable minimum, re-checked each revision, is the simplest control.
Merik keeps the salary structure per employee — basic, HRA and other allowance with basic at half of gross by default — alongside their department, designation and CTC history, so the "everyone within 10% of the minimum" list is a filter rather than a spreadsheet exercise. When a revision requires a correction, the difference goes on the next payslip as an arrears line, computed server-side with the rest of the month, and the payslip is generated and emailed with the label the employee can read.
Merik does not hold state minimum-wage tables or check salaries against them automatically; the notification and the skill mapping stay with you. See the employee and payroll modules.
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