{"id":90944,"date":"2026-11-01T10:00:00","date_gmt":"2026-11-01T04:30:00","guid":{"rendered":"https:\/\/www.taxaj.com/learn\/?p=90944"},"modified":"2026-10-27T09:58:46","modified_gmt":"2026-10-27T04:28:46","slug":"karnataka-minimum-wages-2026-zone-rates-vda","status":"publish","type":"post","link":"https:\/\/www.taxaj.com/learn\/karnataka-minimum-wages-2026-zone-rates-vda\/","title":{"rendered":"Karnataka Minimum Wages 2026: New Zone-Wise Rates, VDA and What Bengaluru Employers Must Do"},"content":{"rendered":"<p class=\"wp-block-paragraph\"><strong>Karnataka revised its minimum wages by a notification dated 22 May 2026, effective immediately. It covers 81 employments, including 18 newly added ones such as e-commerce and courier services and non-teaching staff of private schools, and replaces the old four zones with three. In Zone 1, the area under the Greater Bengaluru Authority, the general monthly basic rate is now \u20b923,376.43 for unskilled workers and \u20b931,114.02 for highly skilled workers, plus a variable dearness allowance of \u20b91,030.80 a month. Employers&#8217; associations have challenged the notification in the High Court, but no stay has been granted, so it is enforceable.<\/strong> This guide sets out the rates, the VDA, the court position and the payroll changes Bengaluru employers should make.<\/p>\n<h2 class=\"wp-block-heading\">General rates from 22 May 2026 (Schedule 4)<\/h2>\n<figure class=\"wp-block-table\">\n<table>\n<thead>\n<tr>\n<th>Skill<\/th>\n<th>Zone 1: Greater Bengaluru (basic per month)<\/th>\n<th>Zone 1 with VDA<\/th>\n<th>Zone 2: other corporations and district HQs<\/th>\n<th>Zone 3: rest of Karnataka<\/th>\n<\/tr>\n<\/thead>\n<tbody>\n<tr>\n<td>Highly skilled<\/td>\n<td>\u20b931,114.02<\/td>\n<td>\u20b932,144.82<\/td>\n<td>\u20b928,285.47<\/td>\n<td>\u20b925,714.07<\/td>\n<\/tr>\n<tr>\n<td>Skilled<\/td>\n<td>\u20b928,285.47<\/td>\n<td>\u20b929,316.27<\/td>\n<td>\u20b925,714.07<\/td>\n<td>\u20b923,376.43<\/td>\n<\/tr>\n<tr>\n<td>Semi-skilled<\/td>\n<td>\u20b925,714.07<\/td>\n<td>\u20b926,744.87<\/td>\n<td>\u20b923,376.43<\/td>\n<td>\u20b921,251.30<\/td>\n<\/tr>\n<tr>\n<td>Unskilled<\/td>\n<td>\u20b923,376.43<\/td>\n<td>\u20b924,407.23<\/td>\n<td>\u20b921,251.30<\/td>\n<td>\u20b919,319.36<\/td>\n<\/tr>\n<\/tbody>\n<\/table>\n<\/figure>\n<p class=\"wp-block-paragraph\">Zone 2 and Zone 3 figures are basic rates; add the same VDA of \u20b91,030.80 a month. Daily rates are the monthly rate divided by 26 (Zone 1 unskilled, for example, is \u20b9899.09 a day before VDA). Some sectors in Schedule 2, such as thermal power stations, foundries and sanitation work, have their own higher rates, so check the schedule for your industry.<\/p>\n<h2 class=\"wp-block-heading\">How the VDA works<\/h2>\n<ul class=\"wp-block-list\">\n<li>4 paise a day for every point by which the average consumer price index of the previous calendar year exceeds the base of 9,469.<\/li>\n<li>For 2026, the average index is 10,328, giving 859 points and a VDA of \u20b91,030.80 a month.<\/li>\n<li>The VDA is revised every year as on 1 April, so the next revision is due on 1 April 2027.<\/li>\n<\/ul>\n<h2 class=\"wp-block-heading\">Who is covered<\/h2>\n<ul class=\"wp-block-list\">\n<li><strong>Listed employments:<\/strong> 81 in all, including security agencies, hotels and restaurants, hostels and guest houses, and the 18 new ones: e-commerce and courier, computer and cyber centres, private school and college non-teaching staff, amusement parks, mobile tower and cable work and others.<\/li>\n<li><strong>Everyone else:<\/strong> since the Code on Wages, 2019 came into force on 21 November 2025, section 5 bars paying any employee below the notified minimum, whatever the sector. Employers argue in court that the Code no longer recognises &#8220;scheduled employments&#8221;; until that is decided, treat the general rates as the floor for staff in offices and shops in Bengaluru.<\/li>\n<li><strong>Where the exposure is:<\/strong> most IT and startup salaries are far above these rates. The real impact is on housekeeping, security, drivers, office assistants, delivery and support staff, and contract workers supplied by agencies.<\/li>\n<\/ul>\n<h2 class=\"wp-block-heading\">The court position (October 2026)<\/h2>\n<ul class=\"wp-block-list\">\n<li><strong>Employers&#8217; challenge:<\/strong> the Karnataka Employers&#8217; Association and others challenged the notification (WP 16145\/2026). On 21 September 2026 the High Court declined interim protection, so the rates apply while the case continues.<\/li>\n<li><strong>Contract and outsourced workers:<\/strong> in September 2026 the High Court stayed government circulars that had deferred the new wages for outsourced and contract workers in public bodies.<\/li>\n<li><strong>Garment industry:<\/strong> a separate 2023 notification for garments was quashed, and the state has six months from October 2026 to revise garment wages afresh. The 22 May notification does not settle garment rates.<\/li>\n<\/ul>\n<h2 class=\"wp-block-heading\">What the Code on Wages adds<\/h2>\n<ul class=\"wp-block-list\">\n<li><strong>The 50% rule:<\/strong> &#8220;wages&#8221; means basic pay, DA and retaining allowance. If excluded items such as HRA, conveyance, special allowances and the employer&#8217;s PF together exceed half of total pay, the excess is added back to wages. This drives PF, gratuity and overtime costs.<\/li>\n<li><strong>Payment dates:<\/strong> monthly wages by the 7th of the next month, and full and final dues within two working days of resignation, dismissal or retrenchment.<\/li>\n<li><strong>Overtime<\/strong> at twice the normal rate, and double wages for work on the weekly off or a festival holiday under the notification.<\/li>\n<li><strong>Wage slips and registers:<\/strong> issue a wage slip on or before payment, keep the combined registers for five years, and display the wage rates. Karnataka&#8217;s own Code on Wages Rules were issued in draft in January 2026 and had not been finalised when we checked.<\/li>\n<li><strong>Floor wage:<\/strong> the Centre has notified how it will fix a national floor wage but has not notified the amount. Karnataka&#8217;s rates are well above any likely floor.<\/li>\n<\/ul>\n<h2 class=\"wp-block-heading\">Penalties<\/h2>\n<ul class=\"wp-block-list\">\n<li>Paying below the minimum: fine up to \u20b950,000.<\/li>\n<li>Repeating the offence within five years: up to three months&#8217; imprisonment, or a fine up to \u20b91 lakh, or both.<\/li>\n<li>Failing to keep registers: fine up to \u20b910,000.<\/li>\n<li>First offences can be compounded at half the maximum fine. The inspector-cum-facilitator must first give the employer a written chance to comply.<\/li>\n<li>A principal employer is liable when a contractor fails to pay minimum wages, so audit your housekeeping and security contracts.<\/li>\n<\/ul>\n<h2 class=\"wp-block-heading\">PF, ESI and gratuity: the knock-on effects<\/h2>\n<ul class=\"wp-block-list\">\n<li><strong>PF wage ceiling:<\/strong> raised from \u20b915,000 to \u20b925,000 a month from 17 September 2026 (see our <a href=\"https:\/\/www.taxaj.com\/learn\/epf-wage-ceiling-25000-september-2026\/\" target=\"_blank\" rel=\"noopener\">EPF wage ceiling guide<\/a>). Coverage is tested on PF wages under the 50% rule, not on CTC.<\/li>\n<li><strong>ESI:<\/strong> the ceiling is still \u20b921,000 a month. A skilled worker in Bengaluru on the new minimum (\u20b929,316.27 with VDA) is above it, so ESI coverage depends on how the pay is made up.<\/li>\n<li><strong>Gratuity<\/strong> is calculated on the Code&#8217;s wages, and fixed-term employees qualify after one year, so a restructuring to meet minimum wages can raise gratuity provisions.<\/li>\n<\/ul>\n<p class=\"wp-block-paragraph\">See our guide to <a href=\"https:\/\/www.taxaj.com\/learn\/pf-esi-registration-employers\/\" target=\"_blank\" rel=\"noopener\">PF and ESI registration for employers<\/a> and our explainer on <a href=\"https:\/\/www.taxaj.com\/learn\/indias-new-labour-codes-explained\/\" target=\"_blank\" rel=\"noopener\">the new labour codes<\/a>.<\/p>\n<h2 class=\"wp-block-heading\">Action list for Bengaluru employers<\/h2>\n<ol class=\"wp-block-list\">\n<li>List every employee and contract worker earning below about \u20b933,000 a month and map each to a skill level.<\/li>\n<li>Compare their basic plus DA (not CTC) with the Zone 1 rate plus VDA, and pay arrears from 22 May 2026 where short.<\/li>\n<li>Check the 50% rule on each salary structure and recalculate PF, ESI and gratuity.<\/li>\n<li>Ask housekeeping, security and staffing contractors for proof that they pay the new rates.<\/li>\n<li>Update wage slips, registers and the notice board with the new rates.<\/li>\n<li>Diary 1 April 2027 for the next VDA change, and watch the High Court case.<\/li>\n<li>If payroll is stretched, a <a href=\"https:\/\/www.taxaj.com\/virtual-cfo\" target=\"_blank\" rel=\"noopener\">virtual CFO<\/a> can run this review across salaries, contracts and provisions.<\/li>\n<\/ol>\n<h2 class=\"wp-block-heading\">Frequently asked questions<\/h2>\n<h3 class=\"wp-block-heading\">What is the minimum wage in Bengaluru in 2026?<\/h3>\n<p class=\"wp-block-paragraph\">Under the general rates from 22 May 2026, Zone 1 (Greater Bengaluru) basic monthly wages are \u20b923,376.43 unskilled, \u20b925,714.07 semi-skilled, \u20b928,285.47 skilled and \u20b931,114.02 highly skilled, plus VDA of \u20b91,030.80.<\/p>\n<h3 class=\"wp-block-heading\">Has the High Court stayed Karnataka&#8217;s new minimum wages?<\/h3>\n<p class=\"wp-block-paragraph\">No. On 21 September 2026 the High Court declined interim protection to the employers challenging the notification, so the rates are in force while the case is heard.<\/p>\n<h3 class=\"wp-block-heading\">Do minimum wages apply to IT companies in Karnataka?<\/h3>\n<p class=\"wp-block-paragraph\">Under the Code on Wages, no employee may be paid below the notified minimum. Most IT salaries are well above it, but support, housekeeping and contract staff need to be checked.<\/p>\n<h3 class=\"wp-block-heading\">When will the VDA change next?<\/h3>\n<p class=\"wp-block-paragraph\">On 1 April 2027, based on the average consumer price index for 2026.<\/p>\n<p class=\"wp-block-paragraph\">TAXAJ&#8217;s Bengaluru team runs payroll, PF, ESI, professional tax and labour code compliance for startups and companies. Talk to our <a href=\"https:\/\/www.taxaj.com\/ca-in-bengaluru\" target=\"_blank\" rel=\"noopener\">Bengaluru office<\/a> or read our note on the <a href=\"https:\/\/www.taxaj.com\/learn\/karnataka-shops-establishments-amendment-act-2026\/\" target=\"_blank\" rel=\"noopener\">Karnataka Shops and Establishments amendment<\/a>.<\/p>\n<div class=\"wp-block-buttons is-layout-flex wp-block-buttons-is-layout-flex\">\n<div class=\"wp-block-button\"><a class=\"wp-block-button__link wp-element-button\" href=\"https:\/\/wa.me\/918802912345?text=I%20need%20help%20with%20Karnataka%20minimum%20wages%20and%20payroll\" target=\"_blank\" rel=\"noopener\">WhatsApp our Bengaluru team<\/a><\/div>\n<div class=\"wp-block-button is-style-outline\"><a class=\"wp-block-button__link wp-element-button\" href=\"tel:+918802812345\">Call 88028 12345<\/a><\/div>\n<\/div>\n<p class=\"has-small-font-size wp-block-paragraph\"><em>Last updated 27 October 2026. Sources: Karnataka Labour Department notification No. KA 411 LWA 2023 of 22 May 2026 (unofficial English translation of the Kannada Gazette); Code on Wages, 2019, sections 2(y), 5, 6, 9, 14, 17, 50, 51, 54 and 56; Code on Wages (Central) Rules, 2026; draft Code on Wages (Karnataka) Rules, 2026; S.O. 5109(E) on the EPF wage ceiling; High Court of Karnataka orders in WP 16145\/2026 (September 2026), the AITUC matter (September 2026) and WA 1684\/2026 (October 2026), as reported by LiveLaw and Bar and Bench. General information only; the Kannada Gazette text prevails, so check your employment&#8217;s schedule with us.<\/em><\/p>\n","protected":false},"excerpt":{"rendered":"<p>Karnataka revised minimum wages for 81 employments on 22 May 2026, with three new zones and increases of up to about 60%. Rates by zone and skill, the VDA, the court position, and what Bengaluru employers should change in payroll, registers and contracts.<\/p>\n","protected":false},"author":1,"featured_media":0,"comment_status":"closed","ping_status":"","sticky":false,"template":"","format":"standard","meta":{"_kad_post_transparent":"","_kad_post_title":"","_kad_post_layout":"","_kad_post_sidebar_id":"","_kad_post_content_style":"","_kad_post_vertical_padding":"","_kad_post_feature":"","_kad_post_feature_position":"","_kad_post_header":false,"_kad_post_footer":false,"_kad_post_classname":"","footnotes":""},"categories":[5],"tags":[],"class_list":["post-90944","post","type-post","status-publish","format-standard","hentry","category-income-tax"],"_links":{"self":[{"href":"https:\/\/www.taxaj.com/learn\/wp-json\/wp\/v2\/posts\/90944","targetHints":{"allow":["GET"]}}],"collection":[{"href":"https:\/\/www.taxaj.com/learn\/wp-json\/wp\/v2\/posts"}],"about":[{"href":"https:\/\/www.taxaj.com/learn\/wp-json\/wp\/v2\/types\/post"}],"author":[{"embeddable":true,"href":"https:\/\/www.taxaj.com/learn\/wp-json\/wp\/v2\/users\/1"}],"replies":[{"embeddable":true,"href":"https:\/\/www.taxaj.com/learn\/wp-json\/wp\/v2\/comments?post=90944"}],"version-history":[{"count":2,"href":"https:\/\/www.taxaj.com/learn\/wp-json\/wp\/v2\/posts\/90944\/revisions"}],"predecessor-version":[{"id":90956,"href":"https:\/\/www.taxaj.com/learn\/wp-json\/wp\/v2\/posts\/90944\/revisions\/90956"}],"wp:attachment":[{"href":"https:\/\/www.taxaj.com/learn\/wp-json\/wp\/v2\/media?parent=90944"}],"wp:term":[{"taxonomy":"category","embeddable":true,"href":"https:\/\/www.taxaj.com/learn\/wp-json\/wp\/v2\/categories?post=90944"},{"taxonomy":"post_tag","embeddable":true,"href":"https:\/\/www.taxaj.com/learn\/wp-json\/wp\/v2\/tags?post=90944"}],"curies":[{"name":"wp","href":"https:\/\/api.w.org\/{rel}","templated":true}]}}