CTC Breakup Calculator

How to calculate a CTC breakup

Start from the number the offer letter states, then decide what it contains. If it is the total cost to the employer, the employer's own contributions — EPF, ESI where the employee is covered, and any gratuity provision — come out of it first, and what remains is the gross salary to be divided into components. If the offer states a salary and the employer bears contributions on top, structure the salary first and add the contributions to find the cost.

The components then fall into place in order. Basic is set as a share of the total, most often half. House rent allowance is set as a share of basic. Any fixed allowances — a travel concession, books, a phone — take their amounts. Bonuses take their bases. One component, usually a special allowance, balances: it is whatever remains once everything else is fixed, and it must not be negative. Finally the employee's own EPF and ESI contributions, professional tax and any other deductions come off the gross to give the in-hand figure, before income tax.

CTC, gross and net

CTC is a cost, not a payment: it includes money the employee never sees each month, such as the employer's EPF and a gratuity provision. Gross salary is what is payable — the components on the payslip before deductions. Net salary, or in-hand, is gross less the employee's statutory contributions and other deductions. Income tax is deducted from that in turn, and depends on the regime and the deductions claimed; the income tax calculator takes the gross figure from here.

Employer and employee contributions

EPF is contributed by both sides at 12% of PF wages. The employer's 12% is split for a member of the pension scheme: 8.33% of wages up to ₹15,000 a month to EPS and the remainder to EPF. The statutory obligation runs up to that ceiling; contributing on full wages above it is the employer's choice. ESI, where the employee is covered, is 0.75% from the employee and 3.25% from the employer on monthly wages up to ₹21,000. Gratuity is entirely the employer's, and a provision in the CTC is a promise for later, not pay now.

The rules this calculator applies

• Wages. Under the Code on Wages, 2019 and the Social Security Code, 2020, wages are basic, dearness and retaining allowance — and if the excluded allowances exceed half of total remuneration, the excess is added back. So wages for EPF, gratuity and bonus are never less than 50% of remuneration. Gratuity and retrenchment compensation stay outside that test. The calculator treats every cash component plus the employer's EPF as remuneration for this purpose, which is a reading of the section rather than a settled ruling.
• EPF. 12% each side; EPS 8.33% up to the ₹15,000 ceiling for members; EDLI 0.5% and administrative charges 0.5% as an employer cost outside the 12%.
• ESI. 0.75% employee and 3.25% employer on monthly cash wages, where those do not exceed ₹21,000. Annual bonus and incentives paid at longer intervals are not ESI wages here. Coverage also depends on the establishment and area, which the calculator cannot know.
• Gratuity. 15 days' wages for each completed year on a 26-day month; the CTC provision is 15/26/12 ≈ 4.81% of wages a year; the statutory ceiling is ₹20 lakh.
• Statutory bonus. For employees whose wages are within the notified ceiling (₹21,000 a month under the central rules), between 8.33% and 20% of the higher of ₹7,000 and the minimum wage. Performance and variable pay are separate, and are employer policy.
• Professional tax. A state levy, entered rather than assumed, capped at ₹2,500 a year.

Three kinds of statement are mixed in any CTC sheet, and the calculator labels them: what the law requires (the rates and ceilings above), what the employer decides (basic at 50%, PF on full wages, gratuity in the CTC, the bonus rate above the minimum), and what the calculator assumes (the default structure, and the reading of remuneration for the 50% test). Rules are as of 2026-09-08 and change by notification; they live in one block in the calculator's code so they can be updated in one place.

A worked example

₹3,00,000 a year, Mode A, EPF applicable, ESI not, no gratuity or bonus: ₹25,000 a month. Basic at 50% is ₹12,500; HRA at 50% of basic is ₹6,250. Remuneration for the wage test is ₹25,000 and half of it is ₹12,500 — equal to basic, so wages are ₹12,500. The employer's EPF is 12% of that, ₹1,500, of which ₹1,041.25 goes to EPS. The special allowance balances: ₹25,000 − 12,500 − 6,250 − 1,500 = ₹4,750. Gross is ₹23,500; the employee's EPF is ₹1,500; in-hand before income tax is ₹22,000. At this gross, ESI would not apply in any case: ₹23,500 is above the ₹21,000 ceiling.

Lower the CTC to ₹2,40,000 and gross falls to about ₹18,800, inside the ceiling, so ESI switches on: 0.75% from the employee and 3.25% from the employer — and because the employer's share now comes out of a fixed CTC, the special allowance shrinks a little to make room for it. That interaction is why the calculator iterates to a balance rather than computing once.

Frequently asked questions

What is the difference between CTC, gross salary and net salary?
CTC is everything the employer spends on you in a year, including its own EPF, ESI and gratuity contributions. Gross salary is what is payable to you before deductions: basic, HRA, allowances and bonuses. Net, or in-hand, is gross after your own EPF and ESI contributions, professional tax and any other deductions. Income tax is deducted on top of that and is not part of this calculator.

Is basic salary required to be 50% of CTC?
No. The calculator uses 50% of CTC as its default because it is common practice, but it is an employer choice. What the law does say, under the Code on Wages, is that "wages" for EPF, gratuity and bonus cannot be less than 50% of total remuneration: if the allowances outside wages exceed half, the excess is treated as wages. The calculator applies that floor automatically and tells you when it has.

When does ESI apply?
For a covered establishment in an implemented area, an employee whose monthly wages do not exceed ₹21,000 (₹25,000 for a person with disability) is covered. The employee contributes 0.75% and the employer 3.25% of wages. The calculator tests the monthly cash wages against the ceiling and switches ESI off above it, and lets you override that for the rest of a contribution period.

How is employer EPF split between EPF and EPS?
The employer contributes 12% of PF wages. For a member of the Employees' Pension Scheme, 8.33% of wages up to ₹15,000 a month goes to EPS and the rest to EPF. An employee who joined with wages above the ceiling and was never a member has the whole 12% credited to EPF. EDLI and administrative charges of about 1% are an employer cost on top, outside the 12%.

Should gratuity be part of CTC?
Many employers include a provision for it, usually 4.81% of wages (15 days' wages on a 26-day month, spread over 12 months). It is a provision, not a payment: gratuity is due only on leaving after the qualifying service. Including it makes the CTC look larger without changing what is paid each month; the calculator shows it separately so that is visible.

What is the difference between statutory bonus and performance bonus?
Statutory bonus is the minimum an eligible employee must receive under the Payment of Bonus Act, now within the Code on Wages: between 8.33% and 20% of bonus wages, for employees whose wages are within the notified ceiling. Performance or variable pay is whatever the employer promises on top, on its own terms. The calculator keeps them as separate components and counts only the second as variable CTC.

Does this calculator work out income tax or TDS on salary?
No. It stops at net pay before income tax, because tax depends on the regime chosen, deductions claimed and other income. Take the gross salary figure to the income tax calculator on this site for the tax.