Hi all, I have recently joined a company where I have been offered a CTC of 2.4 Lac p.a. My last CTC with another employer was 2.4 Lac p.a., and I was getting 18k in hand. So after much negotiation and discussion, my new employer agreed to a CTC of 2.4 and assured me of receiving 18k in hand. However, upon reviewing my salary structure in the offer letter, I am unsure if this is the case. I have attached the offer letter for your reference. Could someone please guide me on whether the provided salary structure is accurate? Thank you for your time.
From India, Pune
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1From India, Pune
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Understanding CTC Components
I am not satisfied with this type of CTC because, as per my knowledge, CTC is divided as follows:
A- Fixed Monthly Salary
This is also known as salary, and its components are as given below:
- Basic: 45% to 55% of CTC (but must be equal to or greater than the minimum wages of the area)
- HRA: 40%/50% of basic (depends on the city)
- Conveyance: Rs. 1600 fixed (as per IT rules for tax exemption)
- Special Allowance: Remaining amount
Total Salary = Basic + HRA + Conveyance + Special Allowance
B- Company Contribution
- EPF: 12% of basic
- ESIC: 4.75% of Total Salary (if the total monthly salary is equal to or less than Rs. 15,000 per month)
- Gratuity: 4.81% of basic (cannot be counted in CTC because it's a benefit provided to employees after completing 5 years. If added to monthly CTC, an employee leaving before 5 years is not eligible for the gratuity amount.)
- Bonus: Similar to gratuity, a bonus is also not counted as part of CTC because it cannot be paid monthly. The percentage of the bonus is decided after successive years of benefits. As per the new rule, you have to check the minimum wages or Rs. 7,000, whichever is higher. Therefore, the amount of bonus cannot be decided.
Total Company Contribution = EPF + ESIC
C- Monthly/Annual Reimbursement
- Medical Reimbursement: Rs. 1250 per month
- LTA: 8.33% of Basic (Annual)
- Children Education Allowance: Rs. 100 per month (valid only for 2 children)
- Performance Incentive: Monthly/Annual
- Variable Pay: Annual
Total CTC = A + B + C
From India, Rudarpur
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I am not satisfied with this type of CTC because, as per my knowledge, CTC is divided as follows:
A- Fixed Monthly Salary
This is also known as salary, and its components are as given below:
- Basic: 45% to 55% of CTC (but must be equal to or greater than the minimum wages of the area)
- HRA: 40%/50% of basic (depends on the city)
- Conveyance: Rs. 1600 fixed (as per IT rules for tax exemption)
- Special Allowance: Remaining amount
Total Salary = Basic + HRA + Conveyance + Special Allowance
B- Company Contribution
- EPF: 12% of basic
- ESIC: 4.75% of Total Salary (if the total monthly salary is equal to or less than Rs. 15,000 per month)
- Gratuity: 4.81% of basic (cannot be counted in CTC because it's a benefit provided to employees after completing 5 years. If added to monthly CTC, an employee leaving before 5 years is not eligible for the gratuity amount.)
- Bonus: Similar to gratuity, a bonus is also not counted as part of CTC because it cannot be paid monthly. The percentage of the bonus is decided after successive years of benefits. As per the new rule, you have to check the minimum wages or Rs. 7,000, whichever is higher. Therefore, the amount of bonus cannot be decided.
Total Company Contribution = EPF + ESIC
C- Monthly/Annual Reimbursement
- Medical Reimbursement: Rs. 1250 per month
- LTA: 8.33% of Basic (Annual)
- Children Education Allowance: Rs. 100 per month (valid only for 2 children)
- Performance Incentive: Monthly/Annual
- Variable Pay: Annual
Total CTC = A + B + C
From India, Rudarpur
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Salary structure CTC 15000.xlsx
Sample Internship Offer Letter.doc