CTC Breakups Salary Below The Tax Limit

CTC Breakups Where The Salary Is Below The Tax Limit?

Posting this on behalf of the query received.

CTC or Cost to Company is the total amount that a company spends (directly or indirectly) on an employee.

It refers to the total salary package of the employee. CTC is inclusive of monthly components such as basic pay, various allowances, reimbursements, etc. and annual components such as gratuity, annual variable pay, annual bonus, etc.

CTC is never equal to the amount of take-home salary of the employee. There are many components in the CTC that one does not receive as part of take-home salary.

CTC = Gross Salary + PF + Gratuity

We have provided some easy steps to help you calculate your take-home salary, also known as in-hand salary and net salary.

In order to calculate take home salary, subtract the Income Tax, Provident Fund (PF) and Professional Tax from the Gross Salary.

Step 1: Calculate gross salary Gross Salary = CTC – (EPF + Gratuity)
Step 2: Calculate taxable income Taxable Income = Income (Gross Salary + other income) – Deductions

In order to determine the part of your income that is taxable, subtract allowances (LTA, Conveyance Allowance, HRA), professional tax, medical bills, medical insurance, tax saving investments, if any and other deductions from your gross salary.

Step 3: Calculate income tax
** Once you have taxable income, you can easily calculate income-tax by referring to the income-tax slab and rates provided below: Tax slab The amount of tax paid by an individual is dependent on the taxable income range.

Step 4: Calculating in-hand/take home salary
Take Home Salary = Basic Salary + Actual HRA + Special Allowance - Income Tax - Employer’s PF Contribution(EPF)

2 Likes

Currently our system setting in greytip portal is showing gross salary = CTC

if we want to modify gross+ employer pf+ gratuity= CTC how greytip can help to make the changes

If anyone from greythr plz guide

2 Likes

Raise ticket to greythr support they can help you on this

Regards
Murthy

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Hi @Ashish

We can make the changes and it’s completely configurable.

Can you please raise a ticket within our portal & get the assistance from the team to help on this.

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Hello,

A question on CTC ie. is there a possibility to include Company provided medical insurance to the CTC? Or any Other perks?

Regards

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In general, Yes majority of the Organisations now a days do so.

Items such as EPF contribution by the employer, life and health facilities, interest subsidies, food and transport allowances are typically a part of the CTC.

Annual bonus, one-time Joining bonus, & incentives may form a bigger chunk of CTC.

1 Like

Very much possible. Please make sure it is not part of Gross. It should be outside Gross like Employer PF

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