Here’s a simple breakdown of the differences between CTC, Gross Salary, and In-hand Salary:

💼 1. CTC (Cost to Company)

• Definition: Total amount a company spends on an employee annually.

• Includes:

  • Basic Salary

  • House Rent Allowance (HRA)

  • Provident Fund (Employer’s contribution)

  • Gratuity

  • Bonuses, medical insurance, etc.

• Important: This is not your take-home pay.

📝 Think of CTC as the maximum value a company assigns to you, including benefits you may not receive in cash.

💵 2. Gross Salary

• Definition: Salary before any deductions.

• Includes:

  • Basic salary

  • HRA

  • Special allowances

  • Bonuses (if applicable)

• Excludes:

  • Employer’s contribution to PF

  • Gratuity

💡 Gross Salary = CTC – (Employer PF + Gratuity + Insurance)

🏦 3. In-hand Salary (Take-home salary)

• Definition: Actual amount credited to your bank account.

• Calculated as:

  • Gross Salary minus Deductions like:

    • Employee’s PF contribution

    • Professional Tax

    • Income Tax (TDS)

    • Health insurance premium (if deducted)

💰 This is the money you actually "see" every month.

📊 Quick Comparison Table:

Let me know if you want an example salary breakdown to see the math in action.