betterjobs

Free template template · Word

Salary Structure Format

A salary structure format is an internal HR sheet that defines how CTC is split into fixed earnings, statutory contributions and benefits for each grade or band. HR and finance use it to design pay policy, keep offers consistent and make sure PF, ESI and gratuity are costed correctly.

  • Editable Word (.docx)
  • Made for India
  • 14 fill-in fields highlighted
  • Free, no sign-up

Preview of the template

[Highlighted] = fill in
[Company Logo][Company Name]

SALARY STRUCTURE – GRADE-WISE

Company:
[Company Name]
Effective From:
[Date]
Version:
[Version Number]
Prepared By:
[HR Name]

1. Component Rules

  • Basic Salary: [Percentage]% of CTC
  • HRA: [Percentage]% of Basic (metro / non-metro as per policy)
  • Special Allowance: balancing figure after all fixed components
  • Employer PF: 12% of Basic + DA, subject to wage ceiling rules as per policy
  • Employer ESI: 3.25% of gross for employees earning up to ₹21,000/month
  • Gratuity provision: as per company policy, payable after 5 years' continuous service

2. Monthly Structure by Grade (₹)

ComponentGrade [G1]Grade [G2]Grade [G3]Grade [G4]
Basic Salary[Amount][Amount][Amount][Amount]
House Rent Allowance (HRA)[Amount][Amount][Amount][Amount]
Conveyance / Transport Allowance[Amount][Amount][Amount][Amount]
Special Allowance[Amount][Amount][Amount][Amount]
Gross Salary (A)[Amount][Amount][Amount][Amount]
Employer PF[Amount][Amount][Amount][Amount]
Employer ESI (if applicable)[Amount][Amount]N/AN/A
Gratuity Provision[Amount][Amount][Amount][Amount]
Employer Contributions (B)[Amount][Amount][Amount][Amount]
Monthly CTC (A + B)[Amount][Amount][Amount][Amount]
Annual CTC[Amount][Amount][Amount][Amount]

3. Estimated Deductions and In-hand (₹ per month)

DeductionGrade [G1]Grade [G2]Grade [G3]Grade [G4]
Employee PF (12%)[Amount][Amount][Amount][Amount]
Employee ESI (0.75%)[Amount][Amount]N/AN/A
Professional Tax ([State])[Amount][Amount][Amount][Amount]
TDS (estimated, as per declaration)[Amount][Amount][Amount][Amount]
Estimated Net Pay[Amount][Amount][Amount][Amount]

4. Notes

Variable pay, performance bonus and reimbursements (fuel, telephone, meal cards) are outside this fixed structure and are governed by separate policies. TDS shown is indicative only and depends on the tax regime and declarations of each employee. This structure applies to all employees joining or revised on or after the effective date.

Prepared by
[HR Name]
HR Department
Reviewed by
[Finance Head Name]
Finance
Approved by
[Authorised Signatory]
[Designation]

What this template includes

  • Grade/band and designation range so each row maps to a level
  • Basic as a percentage of CTC, which drives PF, gratuity and HRA
  • HRA and special allowance to balance fixed pay
  • Employer PF, ESI and gratuity shown separately so CTC is fully costed
  • Statutory deductions (employee PF, ESI, professional tax) for in-hand estimation
  • Rules and notes section explaining percentages and ceilings
  • Approval sign-off from HR and finance

When to use it

  • Designing a pay structure for a new company or a newly created grade
  • Standardising offers so that two employees in the same band get the same component mix
  • Re-working components after Labour Code wage-definition changes
  • Presenting a compensation proposal to founders or the board for approval

How to customise this template

  1. 1Replace the grade codes with your own band names (e.g. L1–L6 or Associate to Director)
  2. 2Set the Basic percentage your policy uses and re-check that HRA is calculated on that Basic
  3. 3Delete the ESI rows for grades whose gross is above the ESI wage limit
  4. 4Add industry allowances such as shift, site or night allowance if applicable
  5. 5Fill professional tax as per the state where employees are located
  6. 6Get the sheet signed by HR head and finance head before using it for offers

HR tips

  • Keep Basic at a level that satisfies the wage definition under the Labour Codes; very low Basic can create compliance risk
  • Show employer contributions inside CTC clearly so candidates understand in-hand versus CTC
  • Review the structure every year alongside the increment cycle
  • Do not mix reimbursements with fixed allowances; keep them in a separate section

This format is a starting point. Review component percentages against the Labour Codes, applicable state rules, your PF/ESI coverage and with a payroll or legal adviser before rollout.

For HR & hiring managers

Hire top talent from BetterJobs

Experienced and fresher candidates across India — blue, grey and white collar. Post a job in 5 minutes and start receiving applications.

  • Post in 5 minutesDescribe the role in one line — we write the job description.
  • Verified applicantsEvery applicant has a verified mobile number.
  • Resume databaseSearch experienced candidates by skill, city and experience.

Frequently asked questions

What is a good salary structure for Indian companies?+

Most companies keep Basic as a meaningful share of CTC, add HRA linked to Basic, and use a special allowance to balance the rest. Employer PF, ESI (where applicable) and gratuity are then added to arrive at CTC.

Is HRA mandatory in the salary structure?+

HRA is not legally mandatory, but it is common because employees living in rented accommodation can claim tax exemption under the old tax regime. Many employers include it for that reason.

Should gratuity be part of CTC?+

Many employers include the gratuity provision in CTC and mention it separately, since it is paid only after eligibility. Whatever you choose, state it clearly in the structure and offer letter.

How is ESI shown in a salary structure?+

ESI applies to employees earning up to ₹21,000 per month gross. The employer's 3.25% appears as a CTC cost and the employee's 0.75% as a deduction.