Understanding Your Salary Breakdown: How is a CTC of Rs. 45,000 Structured with Allowances?

Please provide me with the salary breakdown for a CTC of Rs. 45,000, including variable pay of Rs. 4,000, Conveyance allowance of Rs. 800, EPF of Rs. 885, and PF of Rs. 780. Additionally, could you please specify the Basic salary, HRA, and any other allowances included in the package?

As per your query, please find enclosed the details of the salary. However, I would like seniors at CiteHR to check the same.

Salary Breakdown

XYZ

Monthly and Annual Details

- Basic: ₹22,731.00
- HRA: ₹11,369.00
- Special Allowance: ₹3,372.00
- Total Monthly: ₹37,472.00
- Total Annually: ₹449,664.00
- Conveyance Allowance: ₹800 (Monthly), ₹9,600 (Annually)
- PF: ₹2,728 (Monthly), ₹32,736 (Annually)
- Variable Pay: ₹4,000 (Monthly), ₹48,000 (Annually)
- CTC Gross (in Rs): ₹45,000.00 (Monthly), ₹459,264.00 (Annually)

EPF & PF are the same components, i.e., 12% of Basic + DA. Here, you can see that PF is ₹2,728, which is calculated after finding the Basic component; it cannot be pre-assumed. In case your employers also deduct their contribution from the employee's salary, you have to deduct the same amount (₹2,728) from the employee's salary, so the total PF deductions in that case will be (₹2,728 + ₹2,728 = ₹5,456). Then you have to readjust the in-hand salary. I have calculated Basic as 60.665% of in-hand per month salary, HRA as 50% of Basic + DA (if opted by the employer), and Special allowances (9% of in-hand per month salary). Other variable components remain fixed, such as ₹4,000 & conveyance allowance of ₹800.

Regards,
Pooja

As per your query, please find enclosed the details of the salary, but I would still like seniors at CiteHR to check the same.

Salary Breakdown

BASIC (Rs. 22,731) + HRA (Rs. 11,366) + Other Allowance (Rs. 3,372) = Rs. 37,472/- (in-hand per month salary).
+ Conveyance Allowance = Rs. 800
+ Variable Allowance = Rs. 4,000
+ PF (12% of Basic + DA) = Rs. 2,728
______________________________
TOTAL CTC: Rs. 45,000/-
_______________________________

EPF & PF are the same components, i.e., 12% of Basic + DA. Here you can see that PF is Rs. 2,728, which is calculated after finding the basic component. It cannot be predetermined. In case your employers also deduct their contribution from the employee's salary, you have to deduct the same amount (Rs. 2,728) from the employee's salary. So, the total PF deductions, in that case, will be (Rs. 2,728 + Rs. 2,728 = Rs. 5,456), and then you have to readjust the in-hand salary. I have calculated Basic as 60.665% of the in-hand per month salary, HRA as 50% of Basic + DA (if opted by the employer), and Special Allowances (9% of the in-hand per month salary). This is for employees staying in Metro cities. Other variable components remain fixed, such as Rs. 4,000 and a conveyance allowance of Rs. 800.

I am sorry if I am being too experimental in this calculation. Considering that the contract is for 45,000 per month, it turns out to be an annual package of 540,000. The variable pay would be given as a performance bonus at the end of the year. Thus, the monthly salary stands at 41,000 on which the calculation is to be made. Out of this, 885 turns out to be the EPF, and conveyance is 800. Now let the Basic be 30% of the gross and HRA+DA be 50% of the Gross. Basic = 12,300, HRA + DA = 20,500. Thus, the Special Allowance stands at 6,515, making a total of 41,000.

Deductions would be the PF and EPF = 780 + 885 = 1,665, with a professional tax of Rs. 200 deducted by the employer. Total deductions amount to 1,865. The net payable salary would be Rs. 39,135. This is what I thought of the breakup. Of course, with my assumptions, it could go grossly wrong. I would hope some corrections would be suggested by specialists.

For the salary breakdown, the Basic should be 40% of the CTC, while the HRA should be 50% of the Basic for Metropolitan Cities and 40% for other cities.