India’s largest IT services company, Tata Consultancy Services (TCS), has increased quarterly variable pay for mid- and senior-level employees — a big shift after nearly two years of lower payouts.
According to a report by Moneycontrol, some employees received up to 80% of their variable pay for the October–December quarter.
For many, this marks a welcome turnaround.
Variable Pay Finally Sees a Strong Comeback
Over the past two years, variable payouts for mid and senior employees were reportedly cut to between 20% and 50%.
Now, most mid-level employees are said to have received around 80% of their variable compensation for Q3.
Some senior-level staff received payouts ranging from 40% to 80%.
Earlier, TCS had stated that over 70% of its workforce received 100% of their quarterly variable allowance.
However, sources suggest that this mainly applied to junior employees.
The latest increase brings payouts closer to what employees were originally promised in their offer letters.
AI Push and Better Demand Outlook
The improved payouts come at a time when TCS is restructuring its workforce and focusing heavily on artificial intelligence.
The company recently announced that it has achieved $1.8 billion in annualised AI revenue and completed over 5,000 AI-related projects.
Management has also expressed confidence about a possible demand recovery in 2026, which may have boosted internal sentiment.
Industry-Wide Trend?
TCS is not alone.
Rival IT giant Infosys reportedly paid an average of 85% variable bonus for the quarter ended December 31, 2025 — its strongest payout in over three years.
Meanwhile, Cognizant is expected to roll out a 100% bonus payout for 2025 after achieving its internal “Winner’s Circle” benchmark two years ahead of schedule.
After a long phase of cautious payouts, India’s IT sector may finally be signaling a more confident phase — driven by AI growth and hopes of stronger demand ahead.
