Salary Structure Explained: CTC, Basic, HRA, and Allowances
Understand every component of your salary structure. Learn about CTC breakup, basic pay, HRA, LTA, PF, gratuity, and how they affect your in-hand salary.
Your salary structure is more than just a number on your offer letter. Understanding each component helps you negotiate better and plan your taxes effectively.
Key Components
CTC (Cost to Company): Total cost your employer bears
Basic Salary: 40-50% of CTC, fully taxable
HRA: House Rent Allowance, partially tax-exempt
LTA: Leave Travel Allowance, tax-exempt twice in 4 years
Special Allowance: Fully taxable
PF: 12% of basic (employee), 12% (employer)
Gratuity: 4.81% of basic
Bonus/Performance Pay: Variable component
How In-Hand Salary is Calculated
In-hand = CTC - (PF + Professional Tax + Income Tax + Other deductions)
For a ₹12 LPA salary, typical in-hand is around ₹85,000 per month.
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CalcBit Editorial Team
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