Hello sir,
I'm confused in how to calculate gross salary from the CTC. I checked the threads relating this query but am still confused. my query is if CTC is 450000 pa, then how to find out the gross salary, is it CTC - gratuity, or CTC - (company's contribution to PF + gratuity).
thanks and regards,
Sumit Sharma
From India
1I'm confused in how to calculate gross salary from the CTC. I checked the threads relating this query but am still confused. my query is if CTC is 450000 pa, then how to find out the gross salary, is it CTC - gratuity, or CTC - (company's contribution to PF + gratuity).
thanks and regards,
Sumit Sharma
From India
Hi Sumit.
Calculating gross from CTC is the backward calculation. It depends on several factors -
Allowances that you get
PF applicability
ESIC applicability
Gratuity
Other components of your salary.
Say for Eg: Though we say that salary has 2 vital components - Basic Salary & Dearness Allowance (DA).; most of the private firms do not show DA explicitly and they say the Basic they've put up is inclusive of DA.
This is because Dearness Allowance is the adjustment given according to the rising cost of living of the city due to inflation. Every year or after every X years government redefines the calculation of DA. Its a little complex calculation and I could have shared it only if I had known. I was given a vague breifing about it but do not minutely remember and hence wouldn't comment on the formula. We used do on a lumpsum basis take DA as 20% of Basic for our Compensation related sums.
Now for backward calculation from your CTC to gross-
I am assuming that your CTC components are - Basic, (won't take DA assume Basic is inclusive of DA as is general practice by many forms), HRA, Conveyance, Medical Reimbursements, (i do not know if you have children else would have included Child Education Allowance (CEA) at the rate of 100 Rs per child for 2 children), Gratuity. The reason I didnt take PF is because your Basic (inclusive of DA) if we calculate would be much higher than the prescribed ceiling amount 6,500 pm
Your CTC is 450000 pa (this may vary depending on the components and distribution given to it. Usually Basic is around 50% of CTC and HRA is 50% of Basic for metros and for other cities it is 40%. In my assumption i took HRA as 50% assuming a metro city. Conveyance allowance can be given more than what i have shown but that would attract tax. Medical reimbursement if given against bills is tax exempted to the extent of bill amount or 15,000 pa which ever is less. Food allwoance's tax liability is doubtful for me. Other allowances are taxable)
Pls note that below calcuation is on annual figure.
Basic (Inclusive of DA)------------------------------------- 2,25,000
HRA (50% assuming you in metro)------------------ 1,12,500
Conveyance Allowance----------------------------------- 0,09,600
Medical Reimbursements-------------------------------- 0,15,000
Food Allowance---------------------------------------------- 0,15,000
Mobile Allowance------------------------------------------- 0,50,000
Other Allowances-------------------------------------------- 0,12,083
================================================== =
Gross--------------------------------------------------------------- 3,62,100
================================================== =
Gratuity (Employer's contri for this yr)-------------- 0,10,817
PF Contribution (Employer's end)-------------------- 0,00,000
================================================== =
CTC----------------------------------------------------------------- 4,50,000
Hence your gross pm would be 3,62,100 / 12 = 30,175
This might not be the amount on your pay check as the net pay is your gross less Professional tax less TDS less any other obligations.
Gratuity is calculated on per month basic salary.
your Basic pm is 2,25,000 / 12 = 18,750
Your gratuity = 15 / 26 * 18,750 = 10,817
From India, Mumbai
Calculating gross from CTC is the backward calculation. It depends on several factors -
Allowances that you get
PF applicability
ESIC applicability
Gratuity
Other components of your salary.
Say for Eg: Though we say that salary has 2 vital components - Basic Salary & Dearness Allowance (DA).; most of the private firms do not show DA explicitly and they say the Basic they've put up is inclusive of DA.
This is because Dearness Allowance is the adjustment given according to the rising cost of living of the city due to inflation. Every year or after every X years government redefines the calculation of DA. Its a little complex calculation and I could have shared it only if I had known. I was given a vague breifing about it but do not minutely remember and hence wouldn't comment on the formula. We used do on a lumpsum basis take DA as 20% of Basic for our Compensation related sums.
Now for backward calculation from your CTC to gross-
I am assuming that your CTC components are - Basic, (won't take DA assume Basic is inclusive of DA as is general practice by many forms), HRA, Conveyance, Medical Reimbursements, (i do not know if you have children else would have included Child Education Allowance (CEA) at the rate of 100 Rs per child for 2 children), Gratuity. The reason I didnt take PF is because your Basic (inclusive of DA) if we calculate would be much higher than the prescribed ceiling amount 6,500 pm
Your CTC is 450000 pa (this may vary depending on the components and distribution given to it. Usually Basic is around 50% of CTC and HRA is 50% of Basic for metros and for other cities it is 40%. In my assumption i took HRA as 50% assuming a metro city. Conveyance allowance can be given more than what i have shown but that would attract tax. Medical reimbursement if given against bills is tax exempted to the extent of bill amount or 15,000 pa which ever is less. Food allwoance's tax liability is doubtful for me. Other allowances are taxable)
Pls note that below calcuation is on annual figure.
Basic (Inclusive of DA)------------------------------------- 2,25,000
HRA (50% assuming you in metro)------------------ 1,12,500
Conveyance Allowance----------------------------------- 0,09,600
Medical Reimbursements-------------------------------- 0,15,000
Food Allowance---------------------------------------------- 0,15,000
Mobile Allowance------------------------------------------- 0,50,000
Other Allowances-------------------------------------------- 0,12,083
================================================== =
Gross--------------------------------------------------------------- 3,62,100
================================================== =
Gratuity (Employer's contri for this yr)-------------- 0,10,817
PF Contribution (Employer's end)-------------------- 0,00,000
================================================== =
CTC----------------------------------------------------------------- 4,50,000
Hence your gross pm would be 3,62,100 / 12 = 30,175
This might not be the amount on your pay check as the net pay is your gross less Professional tax less TDS less any other obligations.
Gratuity is calculated on per month basic salary.
your Basic pm is 2,25,000 / 12 = 18,750
Your gratuity = 15 / 26 * 18,750 = 10,817
From India, Mumbai
Hi can u please tell me how to calculate basic pay ..Is it 40 % on CTC r is it calculated on gross pay
From India, Bengaluru
From India, Bengaluru
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