Tata Consultancy Services (TCS), the largest IT services company in India and part of the Tata Group, has announced that over 70% of its employees will receive variable pay for the first quarter of financial year 2026 (April–June).
The remaining employees will get their variable pay based on the performance of their respective business units.
According to a report by ET, TCS’s Chief Human Resources Officer, Milind Lakkad, informed employees via email that all those in the C2 grade (or equivalent) under the QVA plan will receive 100% of their quarterly variable allowance.
For those in C3 grade and above, the payout will be based on the performance of their business unit.
TCS Employee Grades Explained
TCS has a structured grading system for its employees:
Y Level: Trainees
C1 Level: System Engineers
C2 to C5 Levels: Increasing seniority
C3 (A & B) and above: Considered senior staff
CXO Level: Top management
Around 70% of employees fall under the C2 grade and will receive full variable pay for the quarter.
Increment Decision Delayed Due to Economic Challenges
TCS has deferred its annual salary increment decision to the next quarter. Usually, the company begins the increment process on April 1 every year.
This year, however, the decision has been postponed due to economic uncertainties and a consistently weakening dollar, which impacted the company’s revenue.
Despite the challenges, TCS continued hiring and brought in 5,090 new employees in the first quarter. The total headcount now stands at over 6,13,000 employees.
Strong Q1 Performance and Dividend Announcement
TCS reported a net profit of ₹12,760 crore in Q1 FY26, marking a 6% year-on-year increase.
Its operational revenue also grew by 1.32%, reaching ₹63,437 crore compared to ₹62,613 crore in the same period last year.
Following these strong results, TCS has announced a dividend of ₹11 per share for its shareholders.
