1. COMPONENTS IF CTC
 Basic
- D.A
- HRA
- E.A( Educational Allowance)
- T.A
- L.T.A
- Leave Encashment.
- PF subscription of the employer share.
- cost of any housing or other accommodations provided by the employer.
- Cost for Vehicle provided or vehicle allowance.
- Components of CTC
- ESOP
- overheads/Loans taken by the employer on the employee transfer
- Insurance (Group)
- Super Annuation
- Gratuity
- Medical Insurance
- Bonus
- Incentives
- reimbursement of medical/telephone/petrol
- benefits extended through various schemes like housing/vehicle/furniture/ A/C/ etc....
- Food Coupons
- Gestation period expenses ( when a employees joins it takes minimum 2 months to perform to his fullest
)
- Place to sit / (because it has some market value)
- Stationary cost
- company's sponsor tours,
- gifts and incentives ( if any )
Basic Calculation ofCTC
Basic
DAHRATAOther AllowanceMobile Reimbursement / Month
Gross Per Month = Sum of all the above.Gross Per Annum= 12*Gross/Month
PF Contribution= 12% of Basic/AnnumESI Contribution = 4.75% of Gross/Annum
8. Medical = The mediclaim facility provided to an employee who are not covered under ESI as the maximum ceiling
for ESI is 10000/Month.
EX-Gratia/Bonus = A fixed amount as BonusAnnual Fixed Gross Cost= Gross/Annum+ Ex-gratiaAnnual Total Cost =
AFGC + PF+ESICAnnual total cost is also called as CTC.
9. Provident Fund
Employee 12% (Basic wages,dearness allowance, cash value of food concession and retaining allowances if
any)Employer 13.61%Contribution:3.67% = Provident Fund (A/c No.1)8.33% = Pension Fund (A/c No.10)0.5% =
EDLIS -Employees Direct Linked Insurance Scheme (A/c No.21)Administrative Charges: 1.10% of emoluments =
Provident Fund (A/c No.2)0.01% of emoluments = EDLIS (A/c No.22)

2. 10. If gross salary is Less than or equal to Rs.10,000
Employers contribution - Gross salary*4.75%
Employee contribution – Gross salary * 1.75%
ESI
11. for metro 50% on basic
for non metro 40% on basic
Conveyance allowance = 15 or 20% of Basic
transport allowance can be a fixed amount.
HRA
12. P.Tax Salary up to 2001 Rs. 16.00 Salary up to 3001 Rs. 25.00 Salary up to 4001 Rs. 35.00 Salary up to 5001 Rs.
45.00 Salary up to 6001 Rs. 60.00 Salary up to 10001 Rs. 80.00 Salary up to 15001 Rs. 100.00 Salary up to 20001 Rs.
150.00 Salary above 20001 Rs. 200.00
Professional tax
13. LTA TYPE-I (in lieu of LTC Type-I (Home Town):
Reimbursement of 80% of the First class Rail fare for 1250 Kms each way subject to maximum of four full tickets
(Self, Spouse and Children).
LTA TYPE-II (in lieu ofLTC Type-II (All India):
Reimbursement of 90% of First class Rail fare for 1500 Kms each way subject to maximum of four full tickets (Self,
Spouse and Children).
Leave TravelAssistance
14. Only Medical Reimbursement which is paid Rs. 15000/- per year is exempt as per IT Act.(80C of Income Tax)
Dearness Allowance is calculated based on Cost of Leaving Index(Shimla points) based on cost and dearness of
commodities
15. Gratuity is payable only after 5 years or 60 months
15 days salary is payable for every completed year.
So we can say that in 5 years 2 and half months’ salary is payable (only basic and DA) or we can say that in 60
months 2.5 months salary is payable.
Now calculate how much percentage is 2.5 of 60 as under:2.5 x 100/60= 4.16
hence gratuity is payable @ 4.16% of basic and DA
Gratuity