What is a CTC breakup?
Cost to Company (CTC) is the total amount an employer spends on an employee in a year. It is not what you receive in hand. CTC bundles the gross salary (basic, HRA, allowances) with employer contributions such as provident fund, ESI, gratuity provision and sometimes statutory bonus. HR teams must convert a CTC figure into a month-wise salary structure that satisfies labour law, keeps the employee's take-home attractive and adds up exactly to the offered CTC. This calculator does that conversion instantly.
How the structure is built
- Basic salary — a chosen percentage of CTC (40–50% is typical; the Code on Wages expects Basic + DA to be at least 50% of gross).
- HRA — 50% of basic in metro cities and 40% elsewhere, aligned with the Section 10(13A) exemption limits.
- Employer PF — 12% of basic, usually on a wage ceiling of ₹15,000 (₹1,800 per month).
- Gratuity provision — 4.81% of basic (15 days' pay per year ÷ 12 months).
- Employer ESI — 3.25% of gross when gross is ₹21,000 or less.
- Special allowance — the balancing figure so that all components total the CTC.
Worked example
CTC ₹6,00,000, basic 40%, HRA 40% of basic, fixed allowances ₹1,600, employer PF capped at ₹15,000, no gratuity in CTC. Monthly CTC = ₹50,000. Basic = ₹20,000; HRA = ₹8,000; employer PF = ₹1,800. Gross = 50,000 − 1,800 = ₹48,200, so special allowance = 48,200 − 20,000 − 8,000 − 1,600 = ₹18,600. Employee PF of ₹1,800 is deducted, giving a take-home of ₹46,400 before TDS.
Who should use it
HR executives drafting offer letters, accountants setting up payroll in Tally or Excel, and employees comparing two offers. Change the basic percentage to see how PF, gratuity and in-hand pay move, and switch PF to "full basic" for companies that contribute above the statutory ceiling.
Frequently Asked Questions
What percentage of CTC should be basic salary?
Most Indian companies keep basic at 40–50% of CTC. Under the Code on Wages, 2019, allowances should not exceed 50% of total remuneration, so Basic + DA of at least 50% of gross is the safer structure.
Why is my in-hand salary much lower than CTC ÷ 12?
CTC includes employer PF, employer ESI, gratuity provision and bonus which are never paid monthly, and your own PF, professional tax and TDS are deducted from gross. In-hand is usually 75–85% of monthly CTC.
Is gratuity part of CTC legally?
There is no bar on showing the gratuity provision (4.81% of basic) in CTC, but gratuity is payable only after five years of continuous service. Many employees prefer offers where it is shown separately.
Does the calculator compute TDS?
No. It gives take-home before income tax. Use the In-Hand Salary Calculator on this site for a TDS estimate under the new or old regime.
Disclaimer: This tool is for general information and estimation only. Tax rates and rules change — verify with official sources or a professional before acting. Read full disclaimer.