TCS Announces 5% Average Annual Pay Hike Amidst Concerns Over Revised Salary Structure

Tata Consultancy Services (TCS) has unveiled its annual salary revision, granting an average increase of 5% to its employees. The announcement coincides with updates to the company’s compensation structure, which have attracted mixed reactions from the workforce. 

Impact of Compensation Restructuring on Employee Salaries 

As per The Moneycontrol report, on May 18, 2026, TCS rolled out its annual salary hikes averaging 5%. However, the revised CTC structure has caused some concern among employees, with reports of reduced take-home salaries.  

These changes align with the company’s compliance with the new Labour Codes, leading to an adjustment in the compensation structure. 

The restructuring included the removal of gratuity from the displayed CTC, which, despite still being accounted for, influenced the perception of a reduced overall package.  

The changes maintained gross and net in-hand salaries but affected the way benefits are presented. 

Employee Reactions to Salary Adjustments 

Despite the average hike, some staff highlighted noticeable reductions in their annual CTC, ranging from ₹1,000 to ₹10,000, as per report.  

The adjustments, they allege, have resulted in a decreased realised salary, partly due to altered variable pay structures. 

Read More: TCS CEO Krithivasan's Salary Hikes 6.3% to ₹28.1 Crore in FY26 with ₹25 Crore Commission! 

Performance-Based Hikes and Variable Pay Concerns 

Under the performance-driven appraisal process, A+ band employees received increments of 9%-13%, while A band employees saw hikes between 5%-9%.  

B band employees were granted a modest 1%-3.5% raise, and some in the C band experienced negligible or negative hikes. 

Criticism arose over shrinking variable pay components and constraints tied to work-from-office metrics, resulting in stress over potential salary negotiations during job transitions. 

Management’s Response to Salary Restructuring 

Responding to the concerns, a TCS spokesperson assured that the new salary structures comply with labour laws, standardise wages, and protect employees’ take-home pay.  

The spokesperson emphasised the company’s dedication to consistency in awarding increments annually. 

Tata Consultancy Services Share Price Performance  

As of May 19, 2026, at 10:50 AM, Tata Consultancy Services share price on NSE was trading at ₹2,344.60 up by 2.69% from the previous closing price. 

Conclusion 

TCS’s decision to offer a 5% average salary hike reflects its attempt to balance employee satisfaction with compliance obligations. The new salary structure aligns with Labour Code reforms but has led to varying perceptions among staff due to changes in displayed compensation figures. 

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