Salary Breakup

Salaries are paid by the organizations or company to the employees in exchange for the services that are being provided by the employees. Salary structure is the detailed structure of salary being offered. It is further divided into some components like CTC, basic salary, allowances, deductions, insurances, etc.

Components of Salary Structure

  • CTC

CTC is the abbreviation for Cost to Company. It is the total amount spent by a company on an employee. It also refers to the complete package an employee receives as an offer. CTC is not the amount that gets credited to his/her account.

  • Basic Salary

Basic salary is the fixed income excluding benefits and bonuses.

  • Allowances

It is an amount provided by the employer to an employee to meet the service requirements. The most common allowances are DA (Dearness allowance), HRA (House Rent Allowance), Medical, etc.

  • Bonus

A bonus is money awarded to an employee for his/her good service or performance.

  • PF

Provident Fund (PF) is the scheme that is useful after the retirement of an employee. It is an investment policy for all salaried employees.

  • Insurance

Insurance is the deduction of a small amount of money from an employee’s salary which then goes towards the health and life insurance of an employee.

  • Taxes

It is the small amount of money that is being deducted from the employee’s salary to the income tax department.

  • Gross Salary

It is in addition to the basic salary and all the allowances.