diff --git a/.github/workflows/labels.yml b/.github/workflows/labels.yml
new file mode 100644
index 0000000000..8a3dd4d91b
--- /dev/null
+++ b/.github/workflows/labels.yml
@@ -0,0 +1,45 @@
+name: label PRs
+
+on:
+  pull_request:
+    types: [opened, synchronize, reopened]
+
+jobs:
+  auto-label:
+    runs-on: ubuntu-latest
+    steps:
+      - name: Checkout code
+        uses: actions/checkout@v3
+
+      - name: Check for changes and set labels
+        id: check_changes
+        run: |
+          LABELS=""
+          
+          if git diff --name-only origin/main...HEAD | grep -q '^relayer/'; then
+            LABELS="${LABELS}Component: Relayer,"
+          fi
+          if git diff --name-only origin/main...HEAD | grep -q '^contracts/'; then
+            LABELS="${LABELS}Component: Ethereum,"
+          fi
+          if git diff --name-only origin/main...HEAD | grep -q '^web/'; then
+            LABELS="${LABELS}Component: Web,"
+          fi
+          if git diff --name-only origin/main...HEAD | grep -q '^docs/'; then
+            LABELS="${LABELS}Component: Docs,"
+          fi
+          if git diff --name-only origin/main...HEAD | grep -q '^smoketest/'; then
+            LABELS="${LABELS}Component: Smoke Tests,"
+          fi
+          if git diff --name-only origin/main...HEAD | grep -q '^control/'; then
+            LABELS="${LABELS}Component: Control Tool,"
+          fi
+          
+          echo "labels=${LABELS%,}" >> $GITHUB_ENV
+
+      - name: Add labels to PR
+        if: env.labels != ''
+        uses: actions-ecosystem/action-add-labels@v1
+        with:
+          github_token: ${{ secrets.GITHUB_TOKEN }}
+          labels: ${{ env.labels }}
diff --git a/relayer/README.md b/relayer/README.md
index 9616997262..a617925081 100644
--- a/relayer/README.md
+++ b/relayer/README.md
@@ -136,3 +136,5 @@ As we can see it will cost 0.041163771 DOT as transaction fee and the reward is
 For Parachain message relayer take [transaction]( https://dashboard.tenderly.co/snowfork/snowbridge-polkadot/tx/1/0x2dbcf28f8d80c43acd3f08e15b0ec2e3c2c8a929d50e0cba2e3bba5d39738bce) for example:
 
 As we can see it will cost 0.000628 ETH as transaction fee and the reward is 0.000942 ETH, so it's about 0.0003 ETH as incentive for each message.
+
+### Test labels