TCS Increases Variable Pay Range for Mid and Senior Employees in Q4

Tata Consultancy Services Maintains Higher Quarterly Variable Payout for Mid to Senior-Level Employees

Tata Consultancy Services (TCS) has continued to offer a higher quarterly variable payout for mid to senior-level employees for the second consecutive quarter in January-March. According to sources, the IT services giant has provided an average variable pay of 60-80 percent in Q4, following nearly two years of keeping payouts at 20-50 percent through Q2 of FY26.

TCS has closely linked mandatory work-from-office requirements to eligibility for receiving quarterly variable allowance (QVA). Employees with less than 60 percent office attendance are not eligible for the quarterly bonus. The company expects a minimum 85 percent attendance of employees in the office for them to be eligible to get full quarterly variable pay.

Employees with 75-85 percent work from office attendance receive 75 percent of their variable pay, while those with 60-75 percent attendance will only get 50 percent of their variable pay. Notably, employees with office attendance below the required threshold received lower payouts. One employee reported receiving around 50 percent of their variable pay as their office attendance stood at only about 60 percent.

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Variable Payout Linked to Performance

Meanwhile, employees have seen lower performance-linked payouts over the past two years, as TCS trimmed variable pay despite office attendance compliance. The company had previously stated that variable pay is determined based on the business performance of an employee’s entire unit. However, employees have reported deductions ranging from Rs 4-5 lakhs in the past two years as part of QVA.

Comparison of Variable Payouts

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TCS' rival Infosys had reduced performance bonus payouts for the March quarter after disbursing its strongest variable pay in more than three years in the preceding quarter. Notably, TCS has maintained a higher quarterly variable payout for mid to senior-level employees for the second consecutive quarter.

TCS Rolls Out Wage Hikes

TCS became the first IT company to start rolling out salary increments from April onwards for FY26. The company also released its new cost-to-company (CTC) structure, adjusting to the changes in the new Labour Codes. Employees received an average salary hike of about 5 percent in the company’s latest appraisal cycle.

TCS broadly categorises salary hikes based on performance bands such as A+, A, B and C, with top performers typically receiving higher increments and variable payouts. For the current cycle, employees in the top-rated A+ category reported hikes ranging between 9 percent and 13 percent, while those in the A band largely reported increments of 5–9 percent.

Employees in the B band mostly reported hikes in the 1–3.5 percent range, while many in the C band said their increments were negligible or even negative.