Why is gratuity in the CTC if the employee might leave before five years?

Because it is provisioned as a cost regardless of whether any individual employee ends up eligible. Companies that quote it in CTC are counting the accounting provision, not a guaranteed payout to that specific hire.

Can I use this to reverse-check a candidate’s current offer letter?

Yes. Enter their quoted CTC and basic share and compare the resulting HRA and allowances line to what their letter actually shows; it is a fast way to spot a letter that is padding "other allowances" oddly.

Should HRA be 50% or 40% of basic?

It follows Section 10(13A) convention: 50% for a metro city (Delhi, Mumbai, Kolkata, Chennai), 40% elsewhere. Setting it to match keeps the employee’s HRA exemption calculation clean.

CTC breakup generator

You have decided what a role should cost you for the year. What you need next is the breakup an offer letter actually shows: basic, HRA, other allowances, and the two pieces that sit inside CTC without ever reaching a payslip.

This splits your target CTC the reverse way our salary calculators run it: starting from the annual cost and working down to the components, using the same statutory rates.

Basic pay

₹4,80,000

40.0% of ₹12,00,000 CTC

Basic pay: ₹4,80,000
HRA: ₹2,40,000
Other allowances (special allowance, balancing figure): ₹3,99,323
Employer PF contribution: ₹57,600
Gratuity provision: ₹23,077
Total CTC: ₹12,00,000

Everything above is worked out in your browser. Nothing you type is sent to us or saved anywhere.

How this is worked out

Basic is your chosen share of CTC. HRA is a share of basic, which you also choose.
Employer PF is 12% of basic, the same rate used across every other salary tool on this site.
The gratuity provision is 15 days of basic per year of service, annualised the way the Payment of Gratuity Act, 1972 defines it.
Everything left after basic, HRA, employer PF and the gratuity provision is grouped as other allowances, so the components always add back up to your target CTC exactly.

What this does not cover

This does not model performance bonus, joining bonus or ESOPs. Add those as separate lines in the offer letter; they should not be folded into "other allowances".
It assumes PF is calculated on actual basic. If you cap PF at the statutory wage ceiling instead, employer PF will be smaller than this shows.
State-specific items like professional tax or ESI eligibility are not part of this breakup; they are deducted from gross, not built into the CTC split.

Questions people ask

Why is gratuity in the CTC if the employee might leave before five years?: Because it is provisioned as a cost regardless of whether any individual employee ends up eligible. Companies that quote it in CTC are counting the accounting provision, not a guaranteed payout to that specific hire.
Can I use this to reverse-check a candidate’s current offer letter?: Yes. Enter their quoted CTC and basic share and compare the resulting HRA and allowances line to what their letter actually shows; it is a fast way to spot a letter that is padding "other allowances" oddly.
Should HRA be 50% or 40% of basic?: It follows Section 10(13A) convention: 50% for a metro city (Delhi, Mumbai, Kolkata, Chennai), 40% elsewhere. Setting it to match keeps the employee’s HRA exemption calculation clean.

Where these figures come from

Rates and rules on this page were last checked against the source on 31 August 2026. Tax law changes; check the source before you rely on a number for a decision.

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