Complete Breakdown
CTC Salary Breakup in India
All Components Explained 2026
Understand every component inside your CTC — Basic, HRA, PF, Gratuity, ESIC, Bonus — with exact percentages, formulas, and tax treatment.
What is CTC?
CTC (Cost to Company) is the total annual expenditure a company incurs for an employee. It includes everything paid directly to the employee (salary, allowances) plus indirect costs the employer bears on the employee's behalf (PF contribution, ESIC, gratuity provision).
CTC Formula:
CTC = Gross Salary + Employer PF + Employer ESIC + Gratuity + Other Benefits💰
Direct Benefits
Basic, HRA, Allowances — paid monthly in-hand
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Indirect Benefits
Employer PF, ESIC, Gratuity — not in monthly pay
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Variable Pay
Bonus, incentives — performance linked
Sample CTC Breakup — ₹6,00,000 Annual CTC
₹6 LPA Example| Component | Monthly | Annual | % of CTC | Category |
|---|---|---|---|---|
| Basic Salary | ₹25,000 | ₹3,00,000 | 50% | Direct |
| HRA | ₹12,500 | ₹1,50,000 | 25% | Direct |
| Medical Allowance | ₹1,250 | ₹15,000 | 2.5% | Direct |
| Conveyance Allowance | ₹1,600 | ₹19,200 | 3.2% | Direct |
| Special Allowance | ₹4,150 | ₹49,800 | 8.3% | Direct |
| Employer PF | ₹1,800 | ₹21,600 | 3.6% | Indirect |
| Gratuity Provision | ₹1,202 | ₹14,424 | 2.4% | Indirect |
| Performance Bonus | — | ₹30,000 | 5% | Variable |
| Total CTC | ~₹50,000 | ₹6,00,000 | 100% |
⚠️ Indirect benefits (Employer PF + Gratuity = ~₹3,002/month) are in CTC but are NOT credited to your bank account monthly.
Direct Benefits (Monthly Pay)
Basic Salary
Fully TaxableThe core fixed pay. Foundation for HRA, PF, and Gratuity calculations. Higher basic = higher PF but slightly lower take-home.
Monthly CTC × 0.50House Rent Allowance (HRA)
Partially ExemptCovers housing costs. Tax-exempt up to the minimum of: actual HRA, 50% of Basic (metro) / 40% (non-metro), or actual rent − 10% of Basic.
Basic × 0.50Medical Allowance
TaxableStandard fixed component for medical expenses. ₹15,000/year. Fully taxable under the new tax regime.
₹1,250 fixedConveyance Allowance
Partly Exempt (Sec 10(14))Covers commuting costs. ₹1,600/month is exempt from tax under Section 10(14) — ₹19,200/year.
₹1,600 fixedSpecial Allowance
Fully TaxableFills the gap between total CTC and all defined components. Fully taxable. Larger special allowance = higher take-home but more income tax.
Monthly CTC − all other componentsLTA (Leave Travel Allowance)
Exempt (travel proof needed)Covers travel expenses for employee and family during leave. Exempt for 2 trips in a block of 4 calendar years. Requires travel bills.
Company policyEmployer Contributions (Not in Take-Home)
Employer PF Contribution
Not Taxable for EmployeeEmployer deposits 12% of Basic to EPF/EPS. Split: 3.67% to EPF, 8.33% to EPS (pension). Included in CTC but employee never gets it monthly.
MIN(Basic, ₹15,000) × 12%Employer ESIC Contribution
Not Taxable for EmployeeEmployer ESIC is 3.25% of Gross. Only when gross salary ≤ ₹21,000/month. Provides employee health insurance and disability coverage.
Gross × 3.25% (only if Gross ≤ ₹21,000)Gratuity Provision
Exempt on Receipt (after 5 yrs)Employer sets aside 4.81% of Basic monthly. Paid to employee after 5 years of service. Exempt up to ₹20 lakh under Section 10(10).
Basic × 4.81%Variable Pay
Performance Bonus
Fully TaxablePaid on meeting performance targets. Often paid quarterly or annually. Included in CTC but not guaranteed monthly — affects take-home variably.
Company policy (quarterly/annual)See your exact CTC breakup instantly
Enter your annual CTC — get complete salary breakup with all components in seconds.
Frequently Asked Questions
What is CTC salary breakup in India?▼
CTC salary breakup includes Direct Benefits (Basic 50%, HRA 25%, Medical ₹1,250, Conveyance ₹1,600, Special Allowance balance), Indirect Benefits (Employer PF 12% of Basic, Gratuity 4.81% of Basic, Employer ESIC 3.25% if applicable), and Variable Pay (Performance Bonus).
What percentage of CTC is Basic salary?▼
Basic salary is 40–50% of monthly CTC in India. Most companies set it at 50%. A higher Basic increases PF deduction and Gratuity provision, reducing take-home pay but improving long-term retirement savings.
Is gratuity part of CTC in India?▼
Yes. Gratuity provision (4.81% of Basic/month) is included in CTC. However, the employee only receives the accumulated gratuity after completing 5 continuous years of service. It is an indirect benefit — in CTC but not in monthly pay.
What is the difference between CTC and in-hand salary?▼
CTC includes all employer costs. In-hand salary = CTC minus employer-side indirect costs minus employee deductions. For a ₹6 LPA CTC: Monthly CTC = ₹50,000. In-hand = ₹50,000 − ₹3,002 (employer PF + gratuity) − ₹2,000 (employee PF + PT) = ~₹44,998. The gap is about 10–15% of monthly CTC.