Business Increased, Profits Decreased: IT Sector's Profit Are Less Than Business, Due To 62% Income Spent On Employee's Salary

In the fiscal year 2021-22, IT businesses spent 62 percent of their entire income on staff salaries. During this time, IT firms earned a total of Rs 5.5 lakh crore.
Business Increased, Profits Decreased: IT Sector's Profit Are Less Than Business, Due To 62% Income Spent On Employee's Salary
Tata Consultancy Services alone distributed more than 1 lakh crore in pay for the fiscal year 2021-22.

IT businesses must spend two-thirds of their revenue on salaries and benefits. This is why, while the IT sector's business has risen at the same rate over the previous five years, company earnings have not increased at the same rate.

In the fiscal year 2021-22, IT businesses spent 62 percent of their entire income on staff salaries. During this time, IT firms earned a total of Rs 5.5 lakh crore, of which around Rs 3 lakh crore was spent on salaries. This is why the net profit margins of IT firms remained steady over this era.

Total revenue of IT firms in the recent five years was Rs 22 lakh crore

According to NASSCOM statistics, the total revenue of IT firms in the recent five years was Rs 22 lakh crore. Employee salaries and allowances were paid out of the Rs 12 lakh crore.

In terms of income-to-salary ratio, the BFSI (Banking, Financial Services, and Insurance) industry came in second. Companies in this industry spent 5 rupees (50 percent) of every 10 rupees received on wages and allowances. In other industries, the income-to-salary ratio is less than 30%.

TCS spent Rs. 1 lakh crore alone on salaries

Tata Consultancy Services alone distributed more than 1 lakh crore in pay for the fiscal year 2021-22. TCS paid 107554 crores in salaries. After that, Infosys spent 63986 crores on pay, while HCL Technology spent 46130 crores, Wipro spent 45008 crores, Tech Mahindra spent 22286 crores, L&T Infotech spent 9701 crores, and Mindtree spent 6328 crores.

Which corporation paid how much in five years?

Based on its success over the previous five years, Tata Consultancy Services earned 782447 crores, of which it spent 55 percent, or 429962 crores, on salaries. In five years, Infosys made 466281 crores and spent 55 percent of that amount, or 245622 crores, on wages.

L&T Infotech earned 55671 crores and spent 33438 crores, whereas HCL Technology made 342702 crores and spent 178923 crores. Mindtree made 38742 crores while spending 24491 crores. Mindtree and L&T Infotech, for example, spend 63 and 60% of their earnings on salaries, respectively.

Business Increased, Profits Decreased: IT Sector's Profit Are Less Than Business, Due To 62% Income Spent On Employee's Salary
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