Team Siliconindia

·  TCS gives 100% variable pay to 70% of employees for Q1 FY26

·  Senior-level payouts (C3 & above) linked to unit performance

·  Annual salary hike decision still pending amid macro headwinds

Tata Consultancy Services (TCS) has said that approximately 70% of its employees will get 100% variable pay for the quarter ending June 2025. The rest of the employees mainly senior ones will get their payout based on the performance of the respective business units, as per an internal email quoted by the Economic Times.

"All employees up to C2 grade (equivalent) under QVA plan will get 100% of their Quarterly Variable Allowance. For C3 grade and above employees, payouts will be different for each person based on how their business units performed," TCS's Chief Human Resources Officer Milind Lakkad wrote in the communication.

TCS has a hierarchical grading system wherein trainees joining as freshers come under the Y grade, and then there are C1 to C5, and finally CXO grades. The 100% payment would be for employees up to the C2 grade, which would normally be for junior to middle-level professionals. Payments above the C3 grade, encompassing senior personnel and leadership profiles, will be based on performance.

A TCS spokesperson confirmed the news and stressed that this is in accordance with the company's normal quarterly practice.

The annual salary increase decision, though, is still pending as the IT behemoth continues to weather a challenging macroeconomic scenario. During the Q1 earnings call, CEO K Krithivasan mentioned continued delays in client decision-making, discretionary cost cuts, and general business uncertainty stoked by geopolitical tensions and supply chain disruptions.

Since TCS also reimburses performance and provides quarterly wages for most employees, the anticipation for an official decision regarding annual wage increases persists.