Confused About Calculating Basic Salary from CTC? Let's Break It Down Together!

Hi Friends,

I want to know how to calculate the Basic Salary from CTC. Some of my friends have told me that "this is the reverse calculation of the salary." I am confused, please help me.

My company has Basic salary as 55%, HRA 40%, CCA Rs. 800/-, Medical 1250/-, and Special Allowance. The total of the above calculation is Gross Salary. Additionally, the company will pay apart from the salary as follows:

1. Employer Contribution towards the PF is Rs. 780/-
2. Group Medical Insurance Rs. 1000/- (approximately)
3. Meals Coupon Rs. 1250/-

Please send me the reply with an example at the earliest.

Thanks & Regards,
Ravi

Distribution of Annual CTC

If the annual CTC is given, how will we distribute it to BASIC, where 50% of the basic is allocated as HRA, and the amount calculated as basic is also provided as an annual bonus?

My query is, if an employee's Annual CTC is 200,000, how much would he be paid as basic, medical, and education?

- Basic
- HOUSE RENT ALLOWANCE
- MEDICAL REIMBURSEMENT
- EDUCATION ALLOWANCE
- CONVEYANCE ALLOWANCE
- LEAVE TRAVEL ASSISTANCE
- PF (EMPLOYER CONTRIBUTION)
- OTHER ALLOWANCE

Understanding CTC Components

My understanding of CTC is as follows:

The CTC is divided into two or three parts, i.e., Base Pay, Choice Pay, and in some companies, PLI. Let us assume:

- CTC: 100
- Base Pay: 40
- Choice Pay: 50
- PLI: 10

Components of Base Pay

Now, the Base Pay includes Basic Pay, PF Contribution of Employer, and Gratuity. PF Contribution is 12% of Basic Pay, and Gratuity is 4.81% of Basic Pay. So the formula for calculating Basic Pay would be:

Basic Pay = Base Pay / 1.681

Understanding Choice Pay and PLI

Choice Pay can be the amount which an employee has the option to decide from the given options, and PLI is the Performance Linked Incentive which is payable at the end of the period based on an individual's performance.

Thanks,

Pawan