TCS Announces Salary Hikes: 100% Variable Pay for Junior Staff, Higher Payouts for Mid-Senior Levels

Tata Consultancy Services (TCS), India's largest IT services company has rolled out a revised employee compensation structure through a Quarterly Variable Allowance (QVA), aimed at rewarding performance and driving motivation across various job levels. The announcement comes alongside the company's Q2FY26 financial results, which reflect steady growth despite a marginal decline in profit.

TCS Announces Salary Hikes: Full Variable Pay for Junior Employees, Higher Payouts for Mid-Senior Levels

According to TCS Chief Human Resource Officer, Sudeep Kunnumal, junior-level employees (grades C, C1, and C2) will receive 100% of their QVA in the current quarter. These employees, often within the lower salary brackets, typically benefit from consistent annual salary hikes and full variable pay, ensuring income stability and performance-linked incentives.

For mid- and senior-level employees (grade C3A and above), the QVA payout will be performance-based and vary by business unit, but overall, the company has promised an increase compared to last year's payouts. This group, which does not always receive uniform hikes, will see better rewards this year in response to improved business performance and individual contributions.

Annual Salary Increment for TCS Employees

In an internal email, Kunnumal revealed that annual salary increments for employees up to grade C3A became effective from September 25, 2025. Notably, employees who performed exceptionally well received double-digit hikes, reinforcing TCS's focus on merit-based rewards.

"It covers all the people who have been with our organisation, who are entitled for the quarterly bonus, except maybe for new joinees, but it covers practically every one, normally, at the junior level we have been paying 100 per cent, which is what will continue and for seniors, we will pay a higher amount, which is again based on the individual and unit performance," PTI reported, citing TCS Chief HRO Kunnumal.

For employees at C3A and above, Kunnumal said that while the payout will differ across business units, the overall variable pay disbursal will exceed last year's, signaling the company's intent to reward leadership and specialized skills.

TCS Q2 Results: Highlights on Financial Performance

Despite economic headwinds, TCS reported a net profit of Rs 12,075 crore for Q2FY26, reflecting a 3.8% decline from Rs 12,760 crore in the previous quarter. However, the company saw a 3.7% increase in revenue, which stood at Rs 65,799 crore. In constant currency terms, revenue grew 0.8% quarter-on-quarter, indicating stable operations and client delivery.

The firm also noted that its workforce shrunk by nearly 20,000 employees during the September quarter-a significant development for a company of TCS's scale. However, upskilling efforts continue, with the number of employees trained in AI/ML technologies doubling to 1,59,000 over the past year, suggesting a strategic focus on advanced tech capabilities.