How Do I Break Down My Salary Components for Accurate CTC Calculation?

Salary Components and CTC Calculation

- Basic Salary: 9500
- HRA: 475 (5%)
- PF: 780 (on 6500)
- ESI: 180
- Bonus: 700 monthly

Please tell me the CTC calculation and breakup.

Regards,
Sonali

CTC Calculation Basis

CTC is normally calculated on the following basis:

If Gross is ₹10,000, then the ratio is as follows:
- Basic: 40% of Gross, i.e., ₹4,000
- DA: 20% of Basic, i.e., ₹2,000
- CCA: 20% of Basic, i.e., ₹2,000
- HRA: 10% of DA, i.e., ₹1,000
- TPT: 10% of DA limited to ₹1,000

Regards,
JAIKISHEN KUMTEKAR
[Phone Number Removed For Privacy Reasons]

CTC Explanation

CTC means Cost to Company, which includes all the costs associated with a position. To arrive at the CTC, you will need to add up all the costs like Gross Salary + Benefits (Medical + LTA + PF + Gratuity accruals + other benefits if any) + Bonus + Incentives. In the case of a new hire, the cost to the company will also include recruitment costs along with the above.

Regards,

Based on the components given by you, the breakup would be:

Salary Components Breakdown

Basic - 9500
HRA - 4750 (Generally it's 30% to 50%, but it's never 5%)
Bonus - 700
Gross Salary - 14950
Net Salary - 14950 - 780 - 262 = 13,908/-

Employer's Contribution

ESI - 8520 (annual)
PF - 9360 (annual)
Total: 17880

Annual Salary and CTC

Annual Salary - 179400 (monthly salary * 12 months, 14950 * 12)
Employer contribution - 17880 (PF + ESI)

Annual CTC: 1,97,280/-
Rest it all depends on company to company, the components, the allowances, perks, etc.

Dear Sonur,

There are certain criteria set by the Central/State Government that we must adhere to. Additionally, the company has implemented specific policies. While I may not be an expert in this field, I will share what knowledge I have.

CTC Details:

- Basic Salary: 9500
- HRA: 3135 (Basic salary * 33%/100)
- PF: 1140 (12% for employer and employee)
- ESI: 457 (ESI is applicable only for those earning below 20,000 gross salary. The deduction is 4.81% for employees and 5.3% for employers)
- Bonus: Depends on the company's profit
- DA (Dearness Allowance): Mandatory and determined by the state government
- PT (Professional Tax): Mandatory
- LTA: Mandatory

Final Gross (CTC):

There are additional components that need to be considered, and I suggest not finalizing the breakdown without complete information.

If you require a detailed salary breakdown, I can prepare and send it to you. Feel free to contact me with any HR-related queries at any time - [Phone Number Removed For Privacy Reasons].

Regards,

CTC Calculation and Breakdown

CTC stands for Cost to Company, and it is variable as per company policies. Based on the components given by you, the CTC would be as follows:

- Basic Salary: 9500
- HRA: 4750 (50%) (It should be 35%-50% of your Basic)

Monthly Gross Salary (A)
- 14250

Additional Components
- Employer's contribution to PF: 780 (on 6500)
- Employer Contribution to ESI: 677 (4.75% of 14250)
- Bonus: 700

Total Components (B)
- 2157

CTC A+B = 14250 + 2157 = 16407

Monthly In-hand Salary
- Gross salary - monthly deductions
- 14250 - 780 (Employee's PF) - 250 (Employee's ESI)
- 13220

Depending on company policy, if the company pays a bonus on a monthly basis, please add the same to the monthly gross salary and recalculate accordingly.

Thanks & regards,

Roopa Mehra
Asst. Manager- HR

Hello, I joined a software MNC in Mumbai and have a query regarding the restructuring of my salary. Since my company is an LLC type company, they are offering me the option of either keeping my PF component in my salary or withdrawing the same. In case I opt for withdrawal, I would receive the company's PF contribution amount added to my take-home salary. So, I am in a bit of a dilemma about whether I should go for the withdrawal of my PF amount in my monthly salary or opt for PF.

Moreover, as I work in an IT company, I would like to know if the PF component is not included in the salary structure, would that be considered a similar profile to contractual employment. (Note: I am appointed for permanent full-time employment criteria.)

Please guide me ASAP. Thanks in advance 

If your company's strength is 20 or above, all employees should be covered under PF. It is a tax-saving instrument with an attractive interest rate and a long-term saving scheme. Opt for PF coverage.

Pon

CTC Calculation

CTC is calculated based on the annual salary plus 2 months of extra salary. It can vary from place to place.

Thank you.

Salary Components and CTC Calculation

- Basic: 6500
- HRA: 3250 (40-60% of basic)
- CCA: 650 (10% of basic)
- Bonus: 480
- Mobile: 350
- Cony
- Adhoc: 3560
- M Gross: 14790
- LTA
- Med/ESI: 702 (4.75% of M Gross) - Employer's contribution
- Bonus
- Co's PF: 780
- A.M.G.: 16272 (CTC)
- A.G.: 195264

PF: 780 (12% of basic)
ESIC: 258 (1.75% of M Gross) - employee's contribution
PT
Take Home (in hand): 13752

CTC Calculation for Employees

Your question is about how to fix CTC for an employee. Please note that CTC means Cost to Company.

Generally, the CTC will be fixed only if the salary range is large, like 10/12/18 lakhs, to overcome the burden of income tax and show the components as fringe benefits.

In your case, the salary range is very low, and you can fix it like this:


Name:
Date of Joining:
Designation:




1 | Basic + DA | 9500 | 114000
2 | HRA | 475 | 5700
3 | Other Allowance (Bonus) | 700 | 8400

Sub Total A
10675 | 128100


1 | PF | 780 | 9360
2 | ESIC | 507 | 6084
3 | Gratuity | 456 | 5472

Sub Total B
1743 | 20916

12418 | 149016

Please note that all taxes, present and future, are to be borne by you. Benefits are to be claimed as per the company policy and procedure. Gratuity will be paid as per the provisions of the Payment of Gratuity Act.

Any help from my side, please do write to me.

Regards,
Malathesha K S
Triveni Aeronautics Pvt Ltd.

Ya! The company's strength is between 150-200. Usually, the Ltd companies in India have PF as a mandatory component, but since it is an LLC company, it is providing the option of PF withdrawal. Regarding the interest rate, if we withdraw the amount, we can invest in areas where we can get higher returns. But my major concern was about the profile value - "does PF mean that a person is in permanent employment type"?

Regards

pon1965, please revert to me on it as soon as possible. Views from others are also most welcome. Do revert to me ASAP as I need to settle this today itself. Thanks in advance 

Yes! The company's strength is between 150-200 employees. Usually, limited companies in India have Provident Fund (PF) as a mandatory component, but since it is an LLC company, it is providing the option of PF withdrawal. Regarding the interest rate, if we withdraw the amount, we can invest in areas where we can get higher returns. However, my main concern is about the profile value - does PF imply that a person is in permanent employment?

Limited Liability Companies and Provident Fund

Limited Liability Companies (LLCs), like Pvt Ltd companies, are also covered under PF. I believe your company may be avoiding its statutory obligation. If you become a member of the PF, employer contributions will also be made. My suggestion is to join as a PF member. The decision is yours to make.

Regards,
Pon

Sir, as previously mentioned, the company would add the company's PF contribution amount to my take-home pay if I don't opt for the PF component. My only concern was whether my employment type would hold the same value as contractual employment in case the PF component is not included in the salary structure.

Differences Between Contractual and Permanent Employee Salary Structures

In short, what are the components that differentiate a contractual employee's salary structure from that of permanent employees?

The calculation ranges from company to company. The basic may be 45%, 50%, or 60%, and so on. It depends on the standing orders of the company.

Dear all, you have explored the matter in depth. However, I would like to add some facts: payment of bonus depends on the company's financial position. Nevertheless, the bonus should be paid at a minimum rate of 8.33% on the basic salary as per the Bonus Act.

ESIC rates come into effect on a state-to-state basis. For example, in Madhya Pradesh, it is 1.75% on the gross salary for the employee and 4.75% for the employer.

Thanks,

DEVENDRA

I have joined as a Process Trainer in a BPO. I have a little confusion about my take-home salary. Below are the pay details. Please help me understand my take-home.

Offered Pay Details:

- Basic: 6170
- House Rent Allowance: 3085
- Special Duty Allowance: 5985
- Bonus: 700
Total A: 15940

Other Benefits:

- Conveyance: 800
- Medical Allowance: 1250
- LTA: 750
Total B: 2800

Indirect:

- Provident Fund: 740
- Gratuity: 297
Total C: 1037

Cost To Company (A+B+C): 19777

I hope this breakdown clarifies your take-home salary. Let me know if you need further assistance.

I am shocked to see the advice given by Mr. Rudresh. If you people do not know the basics, why do you give advice to others?

1. Please study the ESI Act before you mention any percentages.
2. Bonus Act.
3. There is no clear-cut regulation for fixing HRA, as mentioned by you.
4. DA and PT are not mandatory for private organizations, as mentioned by you.

Sorry for being rude, but please be careful in the future.

Regards,

How can recruitment cost be considered as part of the employee's CTC? It is an overhead expense for the company.

Regards,
Pon

Suppose your CTC calculation is 3 lacs PA, then your calculation will be as per managerial policy, which depends on managerial policy. If your basic salary is decided as Rs 10,500, then your HRA will be calculated at 33%.

CTC Calculation: 3 Lacs PA

PARTICULARS MONTHLY YEARLY
Basic 10,500 126,000
DA 0 0
HRA 3,465 41,580
Medical Allowance 500 6,000
Conveyance Allowance 3,167 38,004
Special Allowance 3,200 38,400
Grand Total 20,832 249,984
P F 1,260 15,120
P Tax 208 2,500

Total Deductions 1,468 17,620
Bonus 750 9,000
L T A 700 8,400
Software Purchase, etc 500 6,000
Medical 750 9,000

Hi, CTC includes the gross salary, employer's ESI, PF, bonus, and LTA. Is it right or not? Can anybody suggest to me?

Regards,
Praveen

Salary Components Breakdown

- **Basic Salary:** Monthly: 10,500 | Yearly: 126,000
- **Dearness Allowance (DA):** Monthly: 0 | Yearly: 0
- **House Rent Allowance (HRA):** Monthly: 3,465 | Yearly: 41,580
- **Medical Allowance:** Monthly: 500 | Yearly: 6,000
- **Conveyance Allowance:** Monthly: 3,167 | Yearly: 38,004
- **Special Allowance:** Monthly: 3,200 | Yearly: 38,400
- **Grand Total:** Monthly: 20,832 | Yearly: 249,984

Deductions

- **Provident Fund (PF):** Monthly: 1,260 | Yearly: 15,120
- **Professional Tax (P Tax):** Monthly: 208 | Yearly: 2,500
- **Total Deductions:** Monthly: 1,468 | Yearly: 17,620

Additional Benefits

- **Bonus:** Monthly: 750 | Yearly: 9,000
- **Leave Travel Allowance (LTA):** Monthly: 700 | Yearly: 8,400
- **Software Purchase, etc.:** Monthly: 500 | Yearly: 6,000
- **Medical:** Monthly: 750 | Yearly: 9,000

Could someone please tell me what the percentage of basic fixation is as per the act and PF rule?

Regards,

Suppose your CTC Calculation is 3 lacs per annum, then your calculation will be as follows as per managerial policy, which depends on managerial policy. If your basic salary is decided as Rs 10,500, then your HRA will be calculated at 33%.

CTC Calculation

- CTC Calculation: 3 lacs per annum

PARTICULARS

- Monthly | Yearly
- Basic: 10,500 | 126,000
- DA: 0 | 0
- HRA: 3,465 | 41,580
- Medical Allowance: 500 | 6,000
- Conveyance Allowance: 3,167 | 38,004
- Special Allowance: 3,200 | 38,400

[A] Grand Total: 20,832 | 249,984

Statutory Deductions

- PF: 1,260 | 15,120
- P Tax: 208 | 2,500
- ESIC: Not applicable due to excess of 15,000 salary

Total Deductions

B Total Deductions: 1,468 | 17,620

Yearly Allowance

- Bonus: 750 | 9,000
- LTA: 700 | 8,400
- Software Purchase, etc.: 500 | 6,000
- Medical: 750 | 9,000

[C] Total: 2,700 | 32,400

[A+B+C] Grand Total: 25,000 | 300,004

CTC Breakdown and Calculation

Good question from an HR professional. CTC can vary from company to company. The breakdown of your CTC will be as follows:

Particulars | Amount (PM) | Amount (PA)
---|---|---
Basic Salary | 9500 | 114000
HRA (5% of Basic) | 475 | 5700

Gross Salary | 9975 | 119700

PF (12% of 6500) | 780 | 9360
ESIC (Gross * 4.75%) | 474 | 5686
Bonus | 700 | 8400

Gross CTC | 11929 | 143146
Net Salary | 8820

Regards,
Yogesh Kulkarni
Assistant Manager - HR
Krishidhan Seeds Pvt. Ltd.
Contact No.: [Phone Number Removed For Privacy Reasons]
Email ID: [Email Removed For Privacy Reasons]

I am working as an HR professional in a newly started organization. Currently, around 20 employees are working here. My question is, as of now, there is no breakdown for employees. How long can I continue this practice? Can you help me with the procedures for creating a breakdown for employees?

Can anybody explain if the CTC calculation (percentage of different allowances) is the same for all grades?

Regards,
Sandeep

Hi All, I am working as a Process Trainer in a BPO. I have a little confusion about my take-home salary. Below, I am mentioning my pay details. Can anyone help me understand my take-home?

Direct
Basic: 6170
House Rent Allowance: 3085
Special Duty Allowance: 5985
Bonus: 700
Total A: 15940

Other Benefits
Conveyance: 800
Medical Allowance: 1250
LTA: 750
Total B: 2800

Indirect
Provident Fund: 740
Gratuity: 297
Total C: 1037

Cost To Company (A+B+C): 19777

Thanks & Regards,
Manjusha

CTC Calculation:

Gross Salary + Employer ESI & PF + Bonus + LTA = CTC

Example:
Gross Salary: 15000
ESI: 000
PF: 780
Bonus: 3500
LTA: 542
CTC: 19822

CTC Calculation

Components | Salary in (Rs.)
--- | ---
Monthly Emoluments | Per Month | Per Annum
Basic | 9500.00 | 114000.00
HRA (5% of Basic) | 475.00 | 5700.00
Total A | 9975.00 | 119700.00

Annual Benefits

Bonus | 700.00 | 8400.00
Total B | 700.00 | 8400.00

Retirement Benefits

Provident Fund @ 12% on Rs. 6500/- | 780.00 | 9360.00
Gratuity @ 4.80% of Basic | 456.00 | 5472.00
Total C | 1236.00 | 14832.00

Other Benefits

ESIC @ 4.75% of Total A | 473.81 | 5685.75
Total D | 473.81 | 5685.75

Grand Total (A+B+C+D) | 12384.81 | 148617.75

Note: Statutory deductions as per rules.

Regards,
Yogesh Kulkarni
[Phone Number Removed For Privacy Reasons]

Dear All,

Please let me know how to calculate:
1. Basic
2. HRA
3. SPA
4. Conveyance?

I only know the Take-Home salary. Please reply ASAP.

Thanks & Regards,
Abhishek KN

Dear members,

Can anyone suggest a pay structure for a 30-lakh CTC annually?

The corrected text with proper spelling, grammar, and paragraph formatting:

360,000 is the yearly CTC. How do I break this down into basic salary, HRA, conveyance allowance, other allowances, or DA, PF, ESI?

I am a beginner.

Ex Gross 19000 Basic 9500 HRA 4750 PF 1140 ESIC 903 Bonus 700 Gross 16993 EPF 1140 EESIC 333 Tot. Deduction 1473 Take Home 15520 CTC 18465

Hello,

My gross salary is $15,500. What is my basic and CTC?