What is Dearness Allowance (DA)?
Dearness allowance (DA) is an allowance paid to offset the rising cost of living, linked to a price index in many government and public sector pay structures. Many private employers fold it into basic pay. The Labour Codes include dearness allowance, with basic pay and retaining allowance, in the definition of wages.
Example
A public sector pay slip shows basic pay and a DA percentage that is revised periodically. Because DA is part of wages, it counts for gratuity and PF calculations in the same way as basic pay.
Related
See basic salary and the 50% wage rule.
Related terms and guides
Sources
- Ministry of Labour and Employment, Compliance Handbook for Employers under the Four Labour Codes, https://www.labour.gov.in/static/uploads/2026/02/83978455025732b99b0165def80ab171.pdf, live official page, linked for readers; link checked 2026-10-31
- Ministry of Labour and Employment, FAQs on Labour Codes (Dec 2025), https://www.labour.gov.in/static/uploads/2026/01/de4758d5bfeffc456d7de97a801891b0.pdf, live official page, linked for readers; link checked 2026-10-31
This is general information, not legal, tax or immigration advice. Rules change and your situation may differ. Consult a licensed attorney or qualified adviser.