Understanding Appointment Letters: How Are CTC, Fixed, and Variable Salaries Structured?

ruhirastogi1
What is the format of an appointment letter with the defined CTC structure? Also, what are the variable and fixed salary components?
Amitmhrm
Hi Ruhi,

The contents of the salary breakup may be as below. You can prepare it according to your own suitability. HRA would be 40 to 60% of the basic salary.

- Basic
- HRA
- TA
- Other Allowance
- Mobile Reimbursement per Month
- Gross Per Month = Sum of all the above.
- Gross Per Annum = 12 * Gross/Month
- PF Contribution = 12% of Basic/Annum
- ESI Contribution = 4.75% of Gross/Annum
- Medical = The mediclaim facility provided to employees who are not covered under ESI, as the maximum ceiling for ESI is ₹10,000/Month. If the amount exceeds this, it will be covered under Mediclaim or as per company policy.
- Ex-Gratia/Bonus = A fixed amount as Bonus
- Annual Fixed Gross Cost = Gross/Annum + Ex-gratia
- Annual Total Cost = AFGC + PF + ESIC
- Annual total cost is also referred to as CTC.

I hope this information will assist you in preparing the necessary details on your end.

Regards,
Amit Seth
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