Infosys Offers Just 65% Variable Pay for Q4, Lowest in Past Three Quarters

Infosys, India’s second-largest IT services company, will offer a reduced variable payout to its employees for the fourth quarter. An average variable bonus of 65% will be paid to eligible staff for Q4 of FY25, Moneycontrol reported. The payout will be disbursed in the May 2025 payroll cycle.

According to the report, Infosys had offered an 80% variable payout for Q3FY25, while the average stood at 90% in Q2FY25. The latest payout applies to employees in Band 6 and below, primarily junior and mid-level staff who receive performance-linked quarterly incentives.

The actual bonus amount is based on individual performance ratings, ranging from 0% for those marked “Needs Improvement” to a maximum of 83% for “Outstanding” performers.

“Amidst the complex macroeconomic environment in Q4, we remained client-focused and responsive to market needs,” the company said in an internal email, as per Moneycontrol.

During the fourth-quarter earnings call last month, CFO Jayesh Sanghrajka told analysts: “We have been able to improve margins by 50 basis points by rewarding our employees better through a higher variable pay through the year.”

However, one Infosys employee described the payout as "quite low".

Infosys reported a consolidated net profit of Rs 7,033 crore for the fourth quarter of FY25, marking an 11.7% drop from Rs 7,969 crore in the same period last year. Revenue for the quarter rose 7.9% year-on-year to Rs 40,925 crore.

For FY26, Infosys offered a conservative revenue growth projection of 0% to 3% in constant currency terms. It expects operating margins to remain in the 20% to 22% range. Infosys CEO Salil Parekh acknowledged prevailing macroeconomic uncertainties but expressed confidence in the company's execution.

The announcement comes amid persistent challenges in the IT sector, including muted client spending and prolonged decision-making cycles in key markets.

Earlier, it was reported that Infosys’ competitor, Tata Consultancy Services (TCS), also reduced the quarterly variable allowance (QVA) for senior employees for the January–March period.

This marked the third consecutive quarter in which TCS trimmed variable pay for senior staff. For Q4FY25, most senior employees received only 20–30% of their QVA. In previous quarters, 60–80% of the payout was withheld, despite employees complying with the company’s return-to-office guidelines.

Later, the company clarified that 70% of its workforce received 100% of their QVA for the January–March quarter.