by Neha Mohanty (According to Indian Labour Law)

Terms like CTC, basic salary, gross salary, allowance, reimbursements, tax deductions, provident fund, insurance, etc. often create confusion for employees. In this blog, we have attempted to delineate all the terms associated with the salary in order to make it simpler for you.

Read more to understand salary breakup and the various terms associated with it.

You can also calculate in-hand salary with the help of this Take-Home Salary Calculator.


CTC or Cost to Company is the total amount that a company spends (directly or indirectly) on an employee. It refers to the total salary package of the employee.

Wife - Lets go for a dinner tonight.

Husband (HR Manager) - Ok.

Husband - Should we go to a cheaper restaurant ?

Wife - No. Let's go to Royal Palace hotel.

Husband - (silence for a minute) - Ok, See you at 7.O 'Clock.

On the way, around 6.30 pm...

Husband - Once upon a time, I had pani puri competition with my sister and she ate 30 pani-puris and defeated me.

Wife - What's so difficult in it?

Husband - Defeating me in Pani-puri eating competition is so difficult.

Wife - I can easily beat you.