Karnataka Minimum Wages 2026-27: Complete Zone-Wise Rate Guide for Shops and Commercial Establishments

A retail chain in Bengaluru with outlets across the city and in three district headquarters processed April 2026 salaries using the same rates as March. The HR team had not received individual notice of any revision. However, during a routine labour inspection in May 2026, the inspector found that the company had applied 2025-26 VDA figures instead of the revised amount effective from 1 April 2026. Because the business operated across Zone I and Zone III locations, the underpayment affected workers at different rates depending on their zone and skill classification. The total arrear liability across 84 employees ran to over Rs. 2.1 lakh for a single month. The compliance failure was not intentional it was simply the result of missing a regulatory update that every employer in a scheduled employment is expected to track independently.

This guide covers the complete Karnataka minimum wages for 2026-27 all four zones, all skill categories, office staff, drivers, VDA calculation, zone definitions, and the compliance steps every employer must complete before the next payroll cycle.

Karnataka Minimum Wages 2026-27: What Changed and Why It Matters

The Government of Karnataka revised the Karnataka minimum wages for Shops and Commercial Establishments under Notification No. KAE 20 LMW 2017 (originally dated 30-12-2017, published in Gazette dated 29-03-2018). The revised rates are effective from 1 April 2026 to 31 March 2027. Consequently, every employer covered under Employment No. 68 — Shops and Commercial Establishments — must apply these rates from the April 2026 payroll cycle without exception.

The revision is driven by the Consumer Price Index update. Specifically, the Directorate of Economics and Statistics, Government of Karnataka, reported that the State Annual Average CPI for Industrial Workers for calendar year 2025 stood at 10,328 points — an increase of 363 points over the 2024 figure of 9,965. Since the VDA formula calculates 4 paise per point above the base index of 6,537, the applicable VDA comes to: (10,328 − 6,537) × 0.04 = Rs. 151.64 per day. However, as notified, the effective VDA applicable is Rs. 174.97 per day (Rs. 4,549.20 per month), which reflects the cumulative VDA including the additional Cost of Living Allowance of Rs. 435.60 mandated for this period. This uniform VDA applies to all zones and all skill categories without exception.

Karnataka Minimum Wages 2026-27: Zone Definitions

Before reading the Karnataka minimum wages rate tables, employers must correctly identify which zone their establishment falls under. The zone determines the applicable basic wage — the VDA of Rs. 174.97/day is identical across all zones. Misidentifying the zone is one of the most common compliance errors in Karnataka payroll management.

Karnataka Minimum Wages 2026-27: Highly Skilled Workers

The highly skilled category under Karnataka minimum wages covers Pharmacists, Chemists, Technical Supervisors, and all other highly skilled workers in Shops and Commercial Establishments. These are roles that require formal qualifications, licensed practice, or supervisory technical authority. The following rates apply from 1 April 2026 to 31 March 2027.

Designation	Zone	Basic/Day (₹)	VDA/Day (₹)	Total/Day (₹)	Total/Month (₹)
Pharmacist & Chemist, Technical Supervisor, Other Highly Skilled	Zone I	593.21	174.97	768.18	19,972.60
	Zone II	564.96	174.97	739.93	19,238.15
	Zone III	538.06	174.97	713.03	18,538.68
	Zone IV	512.44	174.97	687.41	17,872.51

Karnataka Minimum Wages 2026-27: Skilled Workers

The skilled category under Karnataka minimum wages covers a wide range of trade and technical roles in commercial establishments. Specifically, this includes Salesmen/Sales Girls, Compounders, Photo-Artists, Photographers, Watch/Radio/TV/Optical Mechanics and Repairers, Skilled Labour in Lift Fixing, Technician/Mechanical workers, Instrument Shop Carpenters, Furniture Shop Polishers, Refractionarians in Optical Shops, Hair Dressers, Air Condition Plant Operators, and Umbrella/Suitcase Makers. All skilled roles share the same zone-wise rate structure.

Category	Zone	Basic/Day (₹)	VDA/Day (₹)	Total/Day (₹)	Total/Month (₹)
Skilled Workers (all designations above)	Zone I	539.28	174.97	714.25	18,570.47
	Zone II	513.60	174.97	688.57	17,902.79
	Zone III	489.14	174.97	664.11	17,266.91
	Zone IV	465.85	174.97	640.82	16,661.30

Karnataka Minimum Wages 2026-27: Semi-Skilled Workers

Semi-skilled roles under Karnataka minimum wages for Shops and Commercial Establishments include Bill Collectors, Bill Clerks, Godown Keepers, Booking Clerks, Assistant Salesmen/Sales Girls, Assistant Photo Artists, Shop Assistants, Packers, Gas Suppliers, Stove Repairers, Painters, Fruit Juice or Lassi Makers, and all other semi-skilled workers. These positions require some training or guided experience but do not demand a formal trade qualification.

Category	Zone	Basic/Day (₹)	VDA/Day (₹)	Total/Day (₹)	Total/Month (₹)
Semi-Skilled Workers (all designations above)	Zone I	490.25	174.97	665.22	17,295.81
	Zone II	466.91	174.97	641.88	16,688.83
	Zone III	444.68	174.97	619.65	16,110.75
	Zone IV	423.50	174.97	598.47	15,560.20

Karnataka Minimum Wages 2026-27: Unskilled Workers

The unskilled category under Karnataka minimum wages is the broadest it covers all general workers in shops and commercial establishments who do not fall into any of the above categories. This includes Messengers, Weighing Men, Bicycle Fitter/Repairers, workers engaged in drying, storing, washing, ironing (in laundry), measuring, loading and unloading in warehousing godowns and storerooms, workers engaged in grinding establishments, general workers in all shops and commercial establishments (other than in administration and clerical cadre), and all other unskilled workers.

Category	Zone	Basic/Day (₹)	VDA/Day (₹)	Total/Day (₹)	Total/Month (₹)
Unskilled Workers (all designations above)	Zone I	445.69	174.97	620.66	16,137.03
	Zone II	424.46	174.97	599.43	15,585.23
	Zone III	404.25	174.97	579.22	15,059.70
	Zone IV	385.00	174.97	559.97	14,559.20

Karnataka Minimum Wages 2026-27: Office Staff and Drivers

One of the most distinctive features of Karnataka minimum wages for Shops and Commercial Establishments is the inclusion of a separate wage schedule for Office Staff and Drivers. Many employers overlook this category when reviewing compliance, assuming that office roles are covered under the general skilled/semi-skilled classifications. In practice, the notification specifies separate designations with individual wage structures, as follows.

Designation	Zone	Basic/Day (₹)	VDA/Day (₹)	Total/Day (₹)	Total/Month (₹)
Manager / Personal Officer / Marketing Manager / Office Supervisor and similar posts
	Zone I	631.00	174.97	805.97	20,972.20
	Zone II	603.38	174.97	778.35	20,237.20
	Zone III	576.50	174.97	751.47	19,538.20
	Zone IV	550.88	174.97	725.85	18,872.20
Assistant Manager / Assistant Personal Manager / Senior Accountant and similar posts
	Zone I	593.21	174.97	768.18	19,972.60
	Zone II	564.96	174.97	739.93	19,238.15
	Zone III	538.06	174.97	713.03	18,538.68
	Zone IV	512.44	174.97	687.41	17,872.51
Senior Clerk / Cashier / Judgement Writer / Stenographer / Store Keeper / Receptionist and similar posts | Heavy Vehicle, Tractor, Multi-Axle, Crane & Road Construction Vehicle Drivers
	Zone I	539.28	174.97	714.25	18,570.47
	Zone II	513.60	174.97	688.57	17,902.79
	Zone III	489.14	174.97	664.11	17,266.91
	Zone IV	465.85	174.97	640.82	16,661.30
Junior Clerk / Booking Clerk / Computer Operator / Typist / Telephone Operator / Data Entry Operator and similar posts | Car Driver / Jeep Driver / Light Vehicle Drivers
	Zone I	490.25	174.97	665.22	17,295.81
	Zone II	466.91	174.97	641.88	16,688.83
	Zone III	444.68	174.97	619.65	16,110.75
	Zone IV	423.50	174.97	598.47	15,560.20
Attender / Watchman / Lift Operator / Office Boy / Peon / Helper / Dalayat / Majdur / Sweeper and similar posts | Tom Tom / Three Wheeler Vehicle Drivers
	Zone I	445.69	174.97	620.66	16,137.03
	Zone II	424.46	174.97	599.43	15,585.23
	Zone III	404.25	174.97	579.22	15,059.70
	Zone IV	385.00	174.97	559.97	14,559.20

How Karnataka Minimum Wages VDA Is Calculated

Understanding the VDA formula helps employers verify future revisions independently. The Karnataka government calculates VDA at the rate of 4 paise per point for every point of the Consumer Price Index above the base of 6,537 points. For 2026-27, the CPI stands at 10,328 points. Therefore, the excess is 10,328 − 6,537 = 3,791 points. Multiplying: 3,791 × Rs. 0.04 = Rs. 151.64 per day as the base VDA calculation.

In addition to this base VDA, the Karnataka government mandates an additional Cost of Living Allowance (COLA) of Rs. 435.60 per month (Rs. 16.75 per day) effective from 1 April 2026 to 31 March 2027. Combined, the total VDA (Rs. 151.64 + Rs. 23.33 cumulative adjustments) rounds to the notified Rs. 174.97 per day. Consequently, when the next revision is announced, employers should verify the new CPI figure from the Directorate of Economics and Statistics and recalculate accordingly. All future changes to Karnataka minimum wages will follow the same formula structure.

5 Compliance Mistakes Karnataka Employers Make With Minimum Wages

Even experienced payroll teams make errors when applying Karnataka minimum wages, particularly when businesses operate across multiple zones or employ both shop floor and office staff. The following are the most common and most costly mistakes.

Applying Last Year’s VDA to the Current Payroll

The VDA revises every year based on the updated CPI. However, many payroll systems are not updated automatically when the Karnataka notification is issued. As a result, teams continue running April payroll on the previous year’s VDA of Rs. 151.64/day rather than the revised Rs. 174.97/day. Over a full financial year, the cumulative underpayment per Zone I unskilled worker alone exceeds Rs. 5,000. Multiply that across 50 workers and the arrear liability crosses Rs. 2.5 lakh before interest is factored in.

Using the Wrong Zone for Multi-Location Businesses

Businesses with outlets in Bengaluru (Zone I) and in district headquarter towns (Zone III) sometimes apply Zone I rates uniformly, assuming it is the safer choice. In practice, this creates over-deduction for PF purposes if PF is being calculated on the full CTC and the wage structure is built around minimum wages. Conversely, applying Zone III rates to Bengaluru-based workers constitutes underpayment. The correct approach, therefore, is to apply the zone rate specific to the physical location of each establishment where the worker is deployed.

Misclassifying Office Staff Under General Skilled/Semi-Skilled Categories

Karnataka’s minimum wages notification specifically names office roles — Senior Clerks, Junior Clerks, Cashiers, Stenographers, Managers, and Drivers — with designated wage bands that are distinct from the general skilled/semi-skilled categories. Despite this, many employers classify a Data Entry Operator as a general semi-skilled worker and pay at the semi-skilled rate rather than the Junior Clerk rate. While the figures are identical in this case, applying the wrong category creates documentation discrepancies that inspectors flag during wage register reviews.

Not Updating Wage Registers After Each Revision

Under the Minimum Wages Act and the Karnataka Minimum Wages Rules, employers must maintain a wage register in the prescribed format. This register must reflect the current notified minimum wage for each worker’s category. Keeping an outdated register — even if actual payments are correct — is a separate violation. Labour inspectors in Karnataka check both the register and the actual payslips. Consequently, a mismatch between the two, even if the worker was paid correctly, generates a compliance notice that requires time and documentation to resolve.

Treating Contract Workers as Outside the Minimum Wage Framework

The Karnataka minimum wages apply to all workers in the covered scheduled employment, regardless of whether they are permanent, contract, fixed-term, daily wage, or piece-rate workers. Therefore, an employer who correctly pays permanent staff but allows a contractor to deploy cleaning, security, or packing workers at below-minimum rates carries full principal employer liability for that underpayment. This is one of the most frequent violation categories identified during Karnataka labour inspections.

Karnataka Minimum Wages and PF / ESI: The Downstream Impact

A revision in Karnataka minimum wages affects more than just the salary register. For workers whose wages are structured at or near the minimum wage floor, any upward revision directly increases the basic wage component — which in turn increases PF contribution liability. Specifically, if a Zone I unskilled worker’s basic was set at exactly the minimum basic of Rs. 445.69/day and the PF is being deducted on that full basic, then the PF base increases with each wage revision automatically.

For ESI, the threshold of Rs. 21,000 per month becomes relevant when wage revisions push workers previously earning below that figure above it. In such cases, the affected worker exits ESI eligibility and must be deregistered from the following contribution period. Similarly, workers previously above the threshold are unaffected. Because these downstream effects require immediate payroll system updates, employers who handle payroll in-house must track all three changes — minimum wage revision, PF base update, and ESI eligibility re-check — simultaneously. Professional HR outsourcing companies handle all three as part of a single post-revision workflow.

Frequently Asked Questions: Karnataka Minimum Wages 2026-27

What are the Karnataka minimum wages for a skilled worker in Bengaluru in 2026-27?

For a skilled worker in Zone I (Bengaluru/BBMP area), the Karnataka minimum wages for 2026-27 are Rs. 714.25 per day (Basic Rs. 539.28 + VDA Rs. 174.97), equivalent to Rs. 18,570.47 per month at 26 working days. These rates apply to Salesmen, Compounders, Mechanics, Technicians, Carpenters, Hair Dressers, AC Plant Operators, and all other skilled designations listed under Scheduled Employment No. 68.

How long are the 2026-27 Karnataka minimum wages valid?

The current Karnataka minimum wages notification is valid from 1 April 2026 to 31 March 2027. Unlike Gujarat, which revises wages twice a year, Karnataka follows an annual revision cycle. Consequently, the base wage and VDA remain fixed until the next notification is issued for 2027-28. Employers should monitor the Karnataka Labour Department portal at karmikaspandana.karnataka.gov.in for the next revision notification.

Is VDA the same across all zones under Karnataka minimum wages?

Yes. The VDA of Rs. 174.97 per day (Rs. 4,549.20 per month) applies uniformly across Zone I, Zone II, Zone III, and Zone IV, and across all skill categories — Highly Skilled, Skilled, Semi-Skilled, and Unskilled. Only the basic wage differs by zone. Therefore, the total minimum wage gap between Zone I and Zone IV workers in the same skill category equals only the difference in their basic wages, not in their VDA component.

What zone does Mysuru fall under for Karnataka minimum wages?

Mysuru is a City Corporation, so it falls under Zone II for Karnataka minimum wages purposes. Zone II covers all other Corporations in Karnataka other than BBMP. Therefore, a skilled worker in Mysuru earns Rs. 688.57/day (Rs. 17,902.79/month), compared to Rs. 714.25/day (Rs. 18,570.47/month) for the same skilled worker in Bengaluru. Other Corporation cities such as Hubballi-Dharwad, Mangaluru, Belagavi, and Kalaburagi would also fall under Zone II.

Do Karnataka minimum wages apply to contractual and temporary staff in shops?

Yes, without exception. The Minimum Wages Act applies to all workers engaged in a scheduled employment, irrespective of the nature of their engagement — permanent, contract, fixed-term, or temporary. In practice, many retail and commercial establishments in Karnataka use contract workers for security, housekeeping, and delivery functions. The principal employer carries liability if the contractor pays below-minimum wages to these workers. Futurex’s labour compliance services include contractor wage verification as part of the standard compliance review for Karnataka clients.

Official Sources: Karnataka Labour Department, Notification No. KAE 20 LMW 2017, originally dated 30-12-2017, published in Karnataka Gazette dated 29-03-2018. Minimum wages and VDA applicable from 01-04-2026 to 31-03-2027 for Employment No. 68 — Shops and Commercial Establishments. Complete scheduled employment wage rates available at karmikaspandana.karnataka.gov.in. This guide provides general compliance information based on the official notification. For specific classification or wage calculation queries, contact Futurex or the Karnataka Labour Commissioner directly.