TCS Variable Pay 2025: 100% Payout for Over 70% Employees in Q1 – Details Inside

Tata Consultancy Services (TCS), India’s largest IT services provider has initiated a payment of 100% variable pay to over 70% of its employees for Q1 FY26 (April-June 2025). The company confirmed the payout despite global economic uncertainty and stalled discretionary tech spending.

Who Is Eligible for 100% Variable Pay?

There has been an internal email sharing the communication of Milind Lakkad, CHRO that all employees up to C2 grade will be receiving 100% payout under the Quarterly Variable Allowance (QVA) scheme as reported by Economic Times. TCS has a structured grade system:

1. Entry level trainees start at Y grade.
2. Engineers come on-board through C1, C2 and up to C3, C4, C5, with more senior staff being C3+
3. For C3 and C3+ the payouts will be performance linked based on the business units’ performance objectives met.

What About Pay Increases?

Although TCS has consistently paid variable pay it has not yet provided annual pay increases. This delay in wage increase announcements is due to a weak macroeconomic environment and three quarters of revenue declines in dollar revenue.

Workforce Growth Amid Uncertainty

TCS added 5,060 new employees in Q1 FY26, raising its total workforce to almost 613,000. Although hiring continues to be steady, the company faces challenges from delayed project starts, supply chain problems and geopolitical risks, according to CEO K Krithivasan.

What Lies Ahead?

TCS is cautiously optimistic. Krithivasan stated that discretionary technology investments which are critical to growth, will come back to life when macro clarity appears. In the meantime, the company has an unwavering focus on operational stability and incentives based on performance.

Read Also: What Does TCS’s 35-Day Bench Limit and End of Remote Work Mean for IT Employees?