This salary structure is pre-defined by the employer, and the gross and in-hand salary is calculated in accordance with the salary breakup structure. What is Salary Breakup?Ī salary breakup structure consists of various components like basic salary, house rent allowance, special allowance, LTA, car allowance, Provident Fund etc. Some companies calculate it by adding the employer’s contribution towards PF (Provident Fund) and Gratuity to the gross salary.įun Fact: RazorpayX Payroll platform provides this as a configuration option to users, so you can choose how to define the CTC structure for your employees. It includes various components like basic pay, provident fund, allowances, etc. Having said that, it is essential to note that CTC is never equal to the take-home pay received at the end of the month.ĬTC is the total amount spent by the company on an employee, whether directly or indirectly. The CTC, or cost-to-company, is the total salary package that the company offers an employee during recruitment. This article explains all you need to know about the CTC, salary breakup, and its components. But it can be a bit confusing since many components are included in the calculation of salary. Understanding the salary breakup structure is equally important for employees & employers.
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