CTC is the employer's total cost, which includes items you never see in your bank account — the employer's PF contribution and the gratuity provision. Removing those gives the gross salary that appears on your payslip.

Basic is fixed as a percentage of CTC, HRA as a percentage of basic, and whatever remains after basic, HRA and any bonus becomes the special allowance — exactly how most Indian salary structures are built.

Given: CTC ₹12,00,000, basic 40% of CTC, HRA 40% of basic, PF 12%, gratuity 4.81%

Basic = ₹4,80,000  ·  HRA = ₹1,92,000

Employer PF = 4,80,000 × 12% = ₹57,600  ·  Gratuity = 4,80,000 × 4.81% = ₹23,088

Gross = 12,00,000 − 57,600 − 23,088 = ₹11,19,312 → ₹93,276/month

Special allowance = 11,19,312 − 4,80,000 − 1,92,000 = ₹4,47,312

• Basic is typically 40–50% of CTC; some employers set it as a percentage of gross instead.
• HRA is conventionally 50% of basic in metro cities and 40% elsewhere.
• Employer PF is 12% of basic, though many employers cap it at the ₹15,000 statutory wage ceiling.
• Gratuity at 4.81% approximates 15 days' pay per year of service and is payable only after five years.
• Some CTCs also include insurance premiums, meal cards and other benefits not modelled here.

Why is my gross less than my CTC?
Because CTC includes employer PF and the gratuity provision, which are costs to the company, not payments to you.

Why does a high basic matter?
A higher basic raises PF, gratuity and HRA exemption, but also increases the PF deducted from your salary.

Where is income tax?
This calculator stops at gross — use the Take Home Salary Calculator for the post-tax figure.