CTC
Full form: Cost to Company
Salary & HRCTC is the total annual cost an employer bears for an employee including salary, employer PF, gratuity, and all benefits. In-hand salary is significantly lower than CTC.
In detail
Components: Basic (40-50%) + HRA (40-50% of basic) + Special allowance + Employer PF (12% of basic) + Gratuity (4.81% of basic) + Bonus + other benefits. At Rs 12L CTC: in-hand typically Rs 78,000-82,000/month after all deductions.
Formula
In-hand = CTC - Employer PF - Gratuity - Professional tax - Employee PF - Income tax TDS
Real-life example
🇮🇳 India example
Rahul accepts Rs 12L CTC. Basic Rs 5L, HRA Rs 2.5L, Special allowance Rs 2.55L, Employer PF Rs 60K, Gratuity Rs 24K, Bonus Rs 1.11L. In-hand after deductions: approximately Rs 80,000/month.
Frequently asked questions
How to negotiate salary? ▼
Always negotiate CTC not in-hand (in-hand varies by tax bracket). Always get the complete breakup before accepting -- bonus is often not guaranteed.