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Summary
In India, Cost to Company (CTC) is not the same as take-home pay. CTC includes employer contributions to EPF, gratuity, insurance, and other benefits that you never see in your bank account. The salary breakup calculator shows how CTC is split into components and calculates the actual monthly in-hand salary after all deductions.
How it works
Typical CTC components
| Component | Typical % of CTC | Paid to employee? |
|---|---|---|
| Basic salary | 40-50% | Yes (monthly) |
| HRA | 40-50% of basic | Yes (monthly) |
| Special allowance | Variable | Yes (monthly) |
| Employer EPF | 12% of basic | No (to PF account) |
| Employer ESI | 3.25% (if applicable) | No (to ESI fund) |
| Gratuity | 4.81% of basic | No (paid on exit after 5 years) |
| Medical insurance | Fixed amount | No (to insurer) |
| Performance bonus | Variable | Yes (annual/quarterly) |
The basic salary dilemma
A higher basic salary means:
- Higher EPF contributions (more retirement savings, but less in-hand)
- Higher HRA exemption (lower tax under old regime)
- Higher gratuity (more on exit)
- Higher professional tax
A lower basic salary means more in-hand pay but lower retirement benefits and HRA exemption.
From CTC to in-hand
Monthly in-hand = (CTC - Employer EPF - Gratuity - Insurance - Bonus reserved) / 12 - Employee EPF - Professional tax - Income tax TDS
Worked example
CTC: Rs 12,00,000
Breakup:
- Basic: Rs 5,00,000 (41.7%)
- HRA: Rs 2,50,000 (50% of basic)
- Special allowance: Rs 2,38,400
- Employer EPF: Rs 60,000 (12% of basic, capped at Rs 1,800/month)
- Gratuity: Rs 24,038 (4.81% of basic)
- Medical insurance: Rs 15,000
- Performance bonus: Rs 1,12,562
Monthly gross (excluding bonus, employer EPF, gratuity, insurance): Rs 80,700 Minus employee EPF: Rs 5,000 Minus professional tax: Rs 200 Minus TDS (estimated): Rs 7,000 Monthly in-hand: approximately Rs 68,500
CTC is Rs 1,00,000/month but in-hand is only Rs 68,500 — a 31.5% gap.
Inputs explained
- CTC — total annual cost to company
- Basic salary percentage — what fraction of CTC is basic (or the actual amount)
- HRA percentage — of basic salary
- Bonus — fixed or performance-linked component
Outputs explained
- Full breakup table — every component with monthly and annual figures
- Monthly in-hand — the actual salary credited to your bank account
- Employer costs — EPF, gratuity, insurance paid by employer on your behalf
- Tax deductions — TDS estimate per month
Assumptions & limitations
- EPF contribution is capped at 12% of Rs 15,000 (Rs 1,800/month) for the employer’s share going to EPS. The full 12% of basic goes to EPF if basic exceeds Rs 15,000.
- Gratuity is accrued but only paid on exit after 5 years of service.
- Actual salary structures vary enormously between companies. Some include car leases, meal vouchers, or phone allowances.
- The calculator uses a standard structure and may not match your exact offer letter.
Sources
Related calculators
Take-Home Pay
Calculate your take-home pay after income tax, PF, and professional tax. New and old regime comparison. FY 2025-26 rates.
HRA Exemption
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Gratuity
Calculate your gratuity under the Payment of Gratuity Act, 1972. See tax exemption under Section 10(10), formula breakdown, month rounding, and future gratuity projection.
EPF Calculator
Calculate your EPF corpus at retirement with salary growth, employer split (EPF vs EPS), interest compounding, and VPF. See your EPS monthly pension estimate, tax benefits under 80C, and year-by-year growth. Rate: 8.25% p.a.