CTC to In-Hand Salary Breakup

Understanding a salary structure

Offer letters show a CTC, but your payslip shows components. Knowing how CTC turns into components helps you compare offers, negotiate, and plan tax. A typical Indian salary structure looks like this:

• Basic salary: usually 40–50% of CTC. PF, gratuity and HRA are calculated from it.
• HRA: often 40–50% of basic; partly tax-exempt in the old regime if you pay rent.
• Special allowance: the balancing figure, fully taxable.
• Employer PF: 12% of basic (or of ₹15,000), deposited in your EPF account.
• Gratuity: about 4.81% of basic, paid only after 5 years of service.

From gross to net

Gross salary is what’s paid out before deductions: basic, HRA and allowances. From it, the employer deducts your PF contribution (12% of basic), professional tax (depending on your state) and income tax (TDS). The remainder is credited to your bank account.

What a higher basic means

A higher basic increases PF and gratuity (good for long-term savings) but reduces monthly in-hand pay. A lower basic increases the special allowance and in-hand pay but reduces retirement savings. The new labour codes define wages so that basic and related components form at least half of total pay, which may push basic higher in future structures.

Comparing offers

Two offers with the same CTC can give different in-hand pay depending on PF treatment, gratuity inclusion and variable pay. Enter each structure here to compare. For a quick regime comparison, see the in-hand salary calculator; for HRA, the HRA calculator; and for gratuity, the gratuity calculator. Results are estimates; your employer’s payroll is final.

Quick answers

Is variable pay included? Enter only the fixed CTC to see guaranteed monthly pay; variable pay depends on performance and is paid separately. Are meal cards and fuel reimbursements counted? They reduce taxable salary in some structures; add them to other deductions if they apply.