Decode every component of your CTC offer letter — basic, HRA, PF, gratuity, bonus, and perks. Compare two job offers side by side to pick the better deal.
An Indian salary offer letter can be confusing. CTC (Cost to Company) is the total annual spend by the employer — but many components are either partially paid to you or held in trust. Here's what each component means and how to evaluate an offer.
| Component | Typically | Taxability | Notes |
|---|---|---|---|
| Basic Salary | 40–60% of CTC | Fully taxable | Base for PF, HRA, gratuity |
| HRA | 40–50% of basic | Partially exempt | Exempt if paying rent (old regime) |
| Employee PF | 12% of basic | Deductible u/s 80C | Goes to your EPF account |
| Employer PF | 12% of basic | Tax-free (in CTC) | Part of CTC but not gross |
| Gratuity | 4.81% of basic | Tax-free up to ₹20L | Paid only after 5 years service |
| Variable/Bonus | 10–30% of CTC | Fully taxable | Not guaranteed; performance-linked |
| LTA | 1–2 months basic | Exempt twice in 4 years | Only for travel in India (old regime) |
| Perks (insurance, cab) | Varies | Partially taxable | Non-monetary benefit in CTC |
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