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CTC vs Gross vs In-Hand — What's the Difference?

CTC (Cost to Company) is the total amount the employer spends on an employee annually — including PF contributions, gratuity, insurance, and all allowances. Gross salary is the sum of basic, HRA, and allowances before deductions. In-hand (net) salary is what you receive after deducting employee PF, professional tax, and income tax TDS.

Typical CTC-to-in-hand ratio ranges from 65–75%. A ₹12L CTC package usually means ₹7–8.5L in annual in-hand salary.

Standard Salary Structure in India

• Basic salary: 40–50% of CTC. Basis for PF, gratuity, and HRA calculations.
• HRA: 40–50% of basic (50% for metro cities). Exempt from tax up to a limit.
• Special allowance: Fully taxable. The residual component after other allocations.
• Employee PF: 12% of basic, deducted from salary. Employer also contributes 12%.
• Professional tax: State-levied, max ₹2,500/year. Deductible under the old tax regime.