I need to know if there is a formula to break CTC . In the following example I tried to break CTC of Rs.10000.00 however I donít het the desired results. I could definitely adjust the remaining Rs.173.8 in the other allowances however is right way to do it? All of your help would be highly appreciated.
CTC= 10000
Gross Assumption: 9000
Proposed breakup
Basic @50% of Gross = Rs 4500.00
HRA @ 50% of Basic = Rs. 2250.00
Conveyance = Rs. 800.00
Education Allowance = Rs. 200.00
others = Rs. 1250.00
Monthly Gross = Rs.9000
Employer Liabilities
P.F. @13.61% of basic = Rs.612.45
ESI @4.75 % of basic = Rs213.75
CTC= Gross+ Liabilities
=9000+612.45+213.75= Rs.9826.2

From India, Mumbai
You have done CTC breakup correctly and in that Employer liabilities PF contribution not 13.61% don't give like this, add only 12% in CTC remaining is Administrative charges that should not be add in CTC breakup.

From India, Mumbai
You can definitely adjust remaining Rs. 173.8 in other allowances. it would be correct.
PF Admin charges are to be considered as part of CTC so remaining part of calculation is also correct. please check with minimum wages for your area.

From India, Mumbai
can you tell me the relation between CTC and minimum wages,how they are interconnected.
administrative charges to be pay separately by an employer not show in CTC, i have gone through with most of the top companies CTC breakup's they will not add administrative charges in CTC, i will suggest you to refer some CTC breakups of other companies.

From India, Mumbai
I want to ask if you are telling that Administrative charges to show in CTC, then 1 question will come
whatever the CTC we will provide to employee that bifurcation will be showing in payslip then you will show that administrative charges in salary slip as deduction part, if yes then its very funny.
and how you will take that in TDS calculation.

From India, Mumbai
Dear Suhas,
As far as administrative charges are concerned, it cannot be included in the employee's C to C because it is an expenditure for an employer towards statutory contribution which the employer has to pay to the government as per the norms given in the in P.F act. So, it can't be included in the employees' C to C. As an employer / organization they have to incur such kind of charges towards statutory.

From India, Madras
Thank you Ravi, Suhas and Prabhakar for your valuable inputs . I do want to ask you another question about Employees State Insurance Act, 1948 and medical benifits being provided by the employer to the employee
As per ESI act 1948 \" Employee earning Rs.15000.00 or less monthly should be covered under this act.
So the question is
(i)would an employee also be getting medical allowance Rs. 1250.00 by the employer or he should be not eligible for this since he is covered under ESI Act.
(ii)Is the concept of medical allowance is only applicable to the employees earning more then Rs.15000

From India, Mumbai
Hi, when you are registered under ESI act so medical allowances is not applicable in this situation.
From India, Mumbai
CTC is financial Term it means cost to the company. IF company spends single rupee for an employee in any terms then it would be part of CTC including legal contributions.
the term CTC is borrowed from finance and that is why all legal payments done by employer are also part of CTC including admin charges.
minimum wages are to be considered while preparing CTC since we should not pay less than prescribed minimum wages so it has definite relation with CTC calculation.
Regarding medical allowance:Medical allowance is just a break up part in fixed salary. ESIC act does not say anything about Medical allowance. it can be still given even if salary is higher than 15000 Per Month.

From India, Mumbai

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