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Free template template · Word

CTC Breakup Format

A CTC breakup format shows a single employee's cost to company split into fixed pay, variable pay, employer contributions and deductions, both monthly and annually. It is usually attached as an annexure to an offer or appointment letter so the candidate can see the gap between CTC and in-hand salary.

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Preview of the template

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[Company Logo][Company Name]

ANNEXURE – CTC BREAKUP

Employee / Candidate Name:
[Employee Name]
Designation:
[Designation]
Department:
[Department]
Work Location:
[Work Location]
Annual CTC:
[CTC]
Effective Date:
[Date of Joining]

A. Fixed Earnings

ComponentMonthly (₹)Annual (₹)
Basic Salary[Basic Salary][Amount]
House Rent Allowance[HRA][Amount]
Leave Travel Allowance[Amount][Amount]
Special Allowance[Amount][Amount]
Total Gross Salary (A)[Amount][Amount]

B. Employer Contributions

ComponentMonthly (₹)Annual (₹)
Employer Provident Fund (12% of Basic)[Amount][Amount]
Employer ESI (3.25%, if applicable)[Amount][Amount]
Gratuity Provision[Amount][Amount]
Total Employer Contributions (B)[Amount][Amount]

C. Variable Pay (Target)

ComponentPayout FrequencyAnnual Target (₹)
Performance Bonus / Variable Pay[Quarterly / Annual][Amount]

Total Annual CTC (A + B + C) = ₹[CTC]

D. Estimated Monthly In-hand Salary

ItemMonthly (₹)
Gross Salary[Amount]
Less: Employee PF (12% of Basic)[Amount]
Less: Employee ESI (0.75%, if applicable)[Amount]
Less: Professional Tax[Amount]
Less: TDS (estimated)[Amount]
Estimated Net Take-home[Amount]

E. Benefits Outside CTC

  • Group medical insurance cover of ₹[Amount] for self and dependants as per policy
  • Group term life / accident cover as per policy
  • Reimbursements against bills as per expense policy

Notes: Variable pay is linked to individual and company performance and is not guaranteed. TDS is indicative and will be computed on the tax regime and investment declarations you submit. Components may be restructured to comply with applicable law without reducing total CTC.

For [Company Name]
[Authorised Signatory]
[Designation]
Accepted by
[Employee Name]
Date: [Date]

What this template includes

  • Employee and offer identifiers so the annexure is tied to one letter
  • Fixed earnings in monthly and annual columns
  • Variable or performance pay shown separately as target, not guaranteed
  • Employer PF and gratuity listed under employer contributions
  • Employee deductions to show estimated in-hand pay
  • Benefits outside CTC (insurance, meal cards) listed for transparency
  • A note that tax is indicative and depends on the employee's regime

When to use it

  • As Annexure A to an offer letter or appointment letter
  • When a candidate asks how much in-hand salary they will actually receive
  • During salary negotiation to compare two CTC proposals side by side
  • When moving an existing employee to a new structure

How to customise this template

  1. 1Enter the agreed annual CTC first and work backwards to each component
  2. 2Remove the ESI line if the gross salary is above ₹21,000 per month
  3. 3Mention the target variable percentage and the payout frequency
  4. 4Add the professional tax amount applicable in the employee's state
  5. 5Cross-check monthly figures multiply correctly to annual figures before sending

HR tips

  • Always show estimated in-hand pay; it avoids disputes after the first payslip
  • Label variable pay as target and refer to the incentive policy
  • Keep the breakup consistent with your grade-wise salary structure
  • Round figures to the nearest rupee to avoid confusion

For HR & hiring managers

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Frequently asked questions

What is the difference between CTC and in-hand salary?+

CTC is the total annual cost the employer incurs, including employer PF, gratuity and variable pay. In-hand salary is what reaches the bank account after employee PF, professional tax, TDS and other deductions.

Is variable pay part of CTC?+

Many companies include target variable pay in CTC, but the actual payout depends on performance. The breakup should show it separately so the fixed CTC is clear.

Is employer PF included in CTC?+

Usually yes. Employer PF at 12% of Basic plus DA is commonly counted as part of CTC, so it should appear as a separate line.