HR glossary
What is gross salary?
Gross salary is your total pay before deductions - basic, DA, HRA and other allowances. It is CTC minus employer-only costs like employer PF and gratuity. Your in-hand salary is gross minus your own PF, professional tax and income tax (TDS).
CTC vs gross vs in-hand
- CTC: everything the employer spends on you in a year
- Gross: CTC minus employer PF, gratuity and other employer costs
- In-hand: gross minus your PF, professional tax and TDS
What is in gross salary
- Basic salary and dearness allowance (DA)
- House rent allowance (HRA)
- Special allowance and other fixed allowances
- Bonus, incentives and overtime, in the months they are paid
What is not in gross salary
- The employer's PF contribution
- The gratuity provision
- Insurance premiums and other costs the employer pays directly
Allowances cannot make up most of your pay. If allowances and other excluded pay are more than half of your total pay, the extra counts as wages under the Code on Wages, 2019 (s.2(y)), so PF and gratuity are worked out on a bigger amount. See basic salary.
Example - ₹12 lakh CTC, Karnataka, new regime
- Monthly CTC ₹1,00,000 -> gross ₹94,595 -> in-hand ₹91,387
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