Break down your CTC into its different parts.
Basic salary is set as a percentage of CTC.
HRA is set as a percentage of basic.
PF and professional tax are deducted to arrive at take-home.
Basic: % of CTC
HRA: % of Basic
Take-home: Gross − employee deductions
A salary breakup calculator takes the single CTC figure printed on an offer letter and splits it into the pieces that actually make it up: basic pay, house rent allowance, special allowance, the employer's PF contribution and the gratuity the employer sets aside for you. It answers a simple question that the headline number hides: how much of this package is monthly cash, and how much is money you will only see at retirement or when you leave.
In India, CTC is a cost-to-company number. It is what the employer spends on you in a year, not what you earn in hand. Two offers of ₹15,00,000 can feel very different if one puts 50% into basic and the other 35%, because basic drives PF, gratuity and the HRA tax exemption. Job seekers, HR teams drafting offer letters and anyone negotiating a revised structure use a breakup to compare packages on equal terms.
1. Write down the annual CTC and the basic percentage from your offer letter. Basic = CTC × basic% ÷ 100.
2. Work out HRA as a percentage of basic, not of CTC: HRA = Basic × HRA% ÷ 100. Metro offers often use 50%, others 40%.
3. Find the employer's PF: Employer PF = Basic × PF rate ÷ 100, usually 12%.
4. Find the yearly gratuity provision: Gratuity = Basic × 15 ÷ 26 ÷ 12, which is about 4.81% of basic.
5. Special allowance is the balancing figure: Special = CTC − Basic − HRA − Employer PF − Gratuity. If this comes out negative, the structure does not fit inside the CTC.
6. Gross salary = CTC − Employer PF − Gratuity. Then subtract your own PF (Basic × PF rate) and annual professional tax (monthly PT × 12) to get take-home before income tax.
7. Divide each annual figure by 12 to see the monthly payslip view.
Almost every other line in an Indian payslip is defined as a percentage of basic. HRA is a share of basic, PF is 12% of basic, and gratuity is 15 days of basic for each year of service. So when an employer raises the basic percentage, cash allowances shrink and retirement money grows, even though the CTC stays the same. A higher basic also increases the HRA figure used in the tax exemption test. This is why the basic percentage is the single most useful number to negotiate or compare, more than the CTC itself.
Gratuity under Indian law is paid as 15 days of last-drawn basic for each completed year, where a month is treated as 26 working days. One year of service therefore earns 15 ÷ 26 of a month's basic. Since a month's basic is annual basic ÷ 12, the yearly provision is annual basic × 15 ÷ 26 ÷ 12, or about 4.81%. Employers include this in CTC because they are setting it aside for you. You only receive it on leaving, and only if you meet the service condition, so this calculator keeps it out of gross and take-home.
Special allowance has no fixed formula. It is simply whatever is left of CTC after the defined components are placed. That makes it fully taxable and fully cash, which is why structures heavy in special allowance give higher take-home but less tax efficiency. The calculator never lets it go below zero. If basic, HRA, PF and gratuity together exceed the CTC, special allowance shows zero and the structure you entered is not feasible, which is a signal to lower the basic or HRA percentage.
Ananya has an offer of ₹15,00,000 CTC from a Pune firm. Basic is 50% of CTC, HRA is 40% of basic because Pune is treated as non-metro, PF is 12% and professional tax is ₹200 a month.
Answer: Take-home (annual) ₹12,81,542; Basic salary ₹7,50,000; HRA ₹3,00,000
Calculating HRA as a percentage of CTC instead of basic, which overstates it several times.
Treating CTC ÷ 12 as the monthly salary, forgetting that employer PF and gratuity never reach your account each month.
Assuming every employer pays PF on the full basic. Many cap the PF wage at ₹15,000 a month, which changes both PF lines and the special allowance.
Ignoring variable pay or performance bonus bundled into CTC, which is paid only if targets are met.
Comparing two offers only on CTC without checking that the basic percentage and PF treatment are the same.
Comparing two job offers with different basic and allowance splits.
Checking whether a proposed restructuring during appraisal increases cash or only retirement savings.
HR and payroll teams drafting compliant offer letters where components add up exactly to CTC.
Estimating the HRA figure you will use in a rent-based tax exemption calculation.
Explaining a first payslip to a fresher who expected CTC ÷ 12 in the bank.
Do all companies use the same salary structure?
No. The split between basic pay, HRA, and other allowances is different at every company. Change the percentages here to match your own offer letter, for an accurate breakdown.