Recruiters get handed a gross, almost never a CTC. The panel approves “₹10 lakh fixed” or a candidate says “I want ₹1 lakh in hand”, and someone in HR has to wrap the statutory layers around that number and turn it into an offer letter. This calculator starts from the gross you commit to and builds the CTC on top of it.
How the structure is built
Basic sits at 50% of gross. That is not a random default. The labour codes have been in force nationwide since 21 November 2025 and mandate basic plus DA at 50% or more of total wages, so this is no longer optional structuring, it is the compliant floor. HRA comes off basic at whatever percentage you set, usually 40 to 50, and everything left over drops into special allowance, which is fully taxable and carries no statutory weight.
On top of the gross, the employer adds its own CTC costs: employer PF, a gratuity provision at 4.81% of basic, and any bonus or variable pool. Those three are what separate the gross the employee sees on a payslip from the CTC printed on the offer.
The minimum PF lever
Provident fund is where a lot of money quietly leaks. The statutory wage ceiling is ₹25,000 a month since 17 September 2026, up from ₹15,000, which works out to ₹3,000 a month or ₹36,000 a year. Anything above that is voluntary.
On a ₹5 lakh basic, full 12% PF is ₹60,000 a year per employee. Capping it at the ₹25,000 wage ceiling drops the employer contribution to ₹36,000, a saving of ₹24,000 per head. Across a 200-person hiring plan that is ₹48 lakh a year in avoided statutory cost, money that can instead go into the fixed component that candidates actually compare. The calculator flags this saving the moment you pick the minimum basis.
Higher PF is not automatically bad. It is forced retirement saving at a tax-free 8%-ish return, so employees who value the corpus prefer the full 12%. The point is to make it a decision, not an accident.
What the gross does not include
The gross this tool builds is the sum of basic, HRA and special allowance, the taxable salary before employee-side deductions. It is not take-home. From gross you still lose employee PF, professional tax and income tax before anything reaches the bank.
To carry a structure from this page all the way to a monthly in-hand figure, drop the resulting CTC into the take-home salary calculator. To check the HRA slice against the section 10(13A) exemption for a renting employee, use the HRA calculator. And once an offer is out and appraisal season arrives, the CTC hike calculator models what a raise costs the company versus what it adds to the employee’s pocket.
If your next decision is which system actually runs all this, our guide to HRMS vs payroll-only software by company size compares the two for teams from 50 to 500 people.