CTC Breakup & Salary Structure Generator
Turn a CTC figure into a full salary structure — basic, HRA, provident fund, special allowance and employer costs — shown monthly and annually. Adjust the percentages to see how the structure shifts.
PF ceiling ₹15,000 · income tax estimated under the FY 2026-27 new regime
| Component | Monthly | Annual |
|---|---|---|
| Earnings | ||
| Basic | ₹40,000 | ₹4,80,000 |
| House Rent Allowance | ₹20,000 | ₹2,40,000 |
| Special Allowance | ₹38,200 | ₹4,58,400 |
| Gross salary | ₹98,200 | ₹11,78,400 |
| Employer contributions | ||
| PF (Employer) | ₹1,800 | ₹21,600 |
| Cost to company | ₹1,00,000 | ₹12,00,000 |
| Deductions from salary | ||
| PF (Employee) | ₹1,800 | ₹21,600 |
| Professional tax | ₹200 | ₹2,400 |
| Income tax (TDS) | ₹0 | ₹0 |
| Take-home pay | ₹96,200 | ₹11,54,400 |
Income tax is estimated under the new regime with the standard deduction applied. Actual TDS depends on the employee's declarations and chosen regime.
How the structure is built
Indian salary structures are built top-down from CTC. Basic is set as a percentage of it, house rent allowance as a percentage of basic, and provident fund follows from basic at the statutory 12%. Whatever remains after those and the employer's contributions becomes special allowance.
This ordering matters, because it means changing basic changes almost everything else. Raise basic and PF rises, gratuity liability rises, and special allowance shrinks to compensate. The CTC stays the same; where the money sits does not.
The basic salary trade-off
Employees often ask for a lower basic to maximise monthly cash. It works in the short term, but it also lowers the provident fund corpus and, since gratuity is calculated on basic plus dearness allowance, cuts the eventual gratuity substantially. Over a long tenure that difference is significant.
There is also a compliance floor. Structuring basic artificially low to reduce PF has been challenged, and minimum wage rules in several states effectively set a lower bound. A basic below about 40% of CTC starts to attract questions.
What the new regime changed
Under the old regime, salary structuring was genuinely a tax optimisation exercise — HRA exemption, leave travel allowance, and various small allowances all reduced taxable income. The new regime removed most of that, so the structure now mainly affects statutory contributions rather than tax.
The practical implication is that elaborate structures with many small allowance heads have lost most of their purpose for employees on the new regime. A simple structure is easier to administer and produces much the same outcome.
Frequently asked questions
- What is a standard salary structure in India?
- Basic salary at 40–50% of CTC, house rent allowance at 40–50% of basic, provident fund at 12% of basic from both sides, and special allowance absorbing whatever remains. Some employers add conveyance, medical or leave travel allowance as separate lines, though those matter less under the new tax regime.
- Should basic salary be high or low?
- It is a genuine trade-off. A higher basic increases provident fund contributions and the eventual gratuity entitlement, both of which are long-term savings, but reduces monthly cash in hand. A lower basic does the reverse. Forty per cent is a common balance, and some states set minimum wage requirements that effectively put a floor under it.
- Why doesn't gross salary equal CTC?
- Because CTC includes employer contributions that never reach you as salary — principally the employer's 12% provident fund contribution, and sometimes gratuity provisioning or insurance premiums. Gross salary is what your payslip starts from; CTC is what the company spends.
- What is special allowance for?
- It is the balancing figure. Once basic, HRA and the statutory contributions are fixed, special allowance absorbs whatever is left of the CTC. It is fully taxable and carries no exemption, which is why a structure that pushes too much into special allowance is inefficient under the old regime.
- Does the structure still matter under the new tax regime?
- Less than it used to. The new regime removes the HRA exemption and most allowance-based exemptions, so shifting money between HRA and special allowance no longer changes the tax. What still matters is basic, because provident fund and gratuity are calculated on it.
Related free tools
- CTC to In-Hand Salary Calculator
Enter your CTC and see the exact monthly take-home after PF, professional tax and income tax. Free, no sign-up.
- Salary Slip Generator
Create a professional salary slip with earnings, deductions and net pay, and download it as a PDF.
Designing this once, or for every hire?
A structure is easy to work out once and tedious to apply consistently across a team, through increments and revisions. Smart Dhandha holds a salary structure per employee, keeps revision history rather than overwriting it, and runs payroll from it.
- Salary components defined once, applied per employee
- Revision history retained, not overwritten
- Payslips and statutory deductions generated from it
This tool is provided free for general guidance and uses the rates noted above. Statutory rates change, and individual circumstances differ — please confirm with your accountant or a qualified professional before relying on these figures for filing or payroll.