Can We Reverse Calculate Gross Salary from CTC? Seeking Advice on Salary Breakdown

We have the following components in our salary:
Basic + DA
HRA
Education Allowance
Medical Allowance
Conveyance Allowance

Deductions:
PF
PT
ESIC

I just want to know if we could have a reverse formula for calculating the gross figure if I have a CTC figure. Kindly let me know.

Dear Bhavna,

This forum has provided numerous examples on CTC and related queries. Please go through them. Could you clarify what you mean by the reverse formula here? All these components are part of the CTC structure.

Thank you.

This forum is primarily to provide guidance and suggestions on issues related to HR functions. What you have asked is related to a mathematical equation. Though CTC calculation is also part of HR, making a reverse calculation is something different.

Reverse Calculation of CTC

Now, coming to your points, the reverse calculation can be done only if we have a stepwise CTC structure dependent upon some percentage linked to the previous component. However, you can easily calculate the GROSS if you have all CTC components (basic pay structure, employer’s contributions, annual emoluments, etc.). Reverse calculation is not required at all.

Components of CTC

Other than GROSS, CTC has some extra components:

1. Components that are generally not paid on a monthly basis (Bonus, Gratuity, Leaves, etc.).
2. Employer contributions towards social security and other legal and statutory compliances (PF, ESI, PT, etc.).
3. Any other allowance which the company pays annually or half-yearly (LTA, Medical/Phone/Fuel Allowances, etc.).

Please share specific figures of your CTC or an Excel sheet, and a learned member will help you calculate the GROSS.

Dear Bhavana, it's more like a mathematical calculation; we have to assume certain things and calculate the Gross. I hope this will help you.

Assuming Basic and Calculating Gross

If CTC is $23,000, assume Basic to be $11,500 (50% of CTC). PF (Employer side) is 12% of Basic, which equals $1,380. Subtracting PF from CTC gives $21,620. ESIC (Employer side) is 4.75% of $21,620, which equals $1,027. Subtracting ESIC from the assumed gross gives $20,593.

If $20,593 is the Gross, then calculate Basic as 50% of Gross, which is $10,000. PF (Employer) would be $1,200.

Steps to Calculate the Gross

To calculate the Gross:
$23,000 (CTC) - $1,200 (PF) = $21,800
4.75% of $21,800 = $1,035
Subtracting ESIC gives $20,765.

Repeating the Process

Repeat the process with each result:
$21,800 - {4.75% of $20,765 (986)}
$21,800 - {4.75% of $20,814 (988)}
$21,800 - {4.75% of $20,812 (988)}

If two consecutive results are the same, that amount will be the original ESIC (Employer) amount, which in this case is $988.
CTC - PF (Employer) - ESIC (Employer) = Gross
$23,000 - $1,200 - $988 = $20,812.
$20,812 will be the final Gross.

After deducting PF (Employee side), ESIC (Employee side, 1.75%), and PT from the Gross, the result will be the Net amount or Take-home amount.