Roadmap › Career Gaps, Job Changes & Salary Negotiation › Module: Salary and Offers
Lessons in this course (11)
5. Understanding an offer (India: CTC, fixed, variable, in-hand)
Basic★ Must knowLesson 5 of 11
CTC (Cost to Company) is the total annual cost to the employer — not what you receive monthly.
| Component | Notes |
|---|---|
| Basic salary | Often 40–50% of fixed pay; drives PF and gratuity |
| HRA | House rent allowance (tax-exempt portion under the old tax regime if you pay rent) |
| Special/other allowances | Taxable balancing component |
| Variable pay / performance bonus | Paid based on company and individual performance — not guaranteed |
| Employer PF contribution | 12% of basic (often capped on ₹15,000 basic) — part of CTC but goes to your PF account |
| Gratuity | Typically 4.81% of basic, payable after 5 years of continuous service (Payment of Gratuity Act) |
| Insurance (health, term) | Group policies; sometimes included in CTC |
| Joining bonus | One-time; often clawed back if you leave within 12 months |
| ESOPs / RSUs | Equity with a vesting schedule (e.g. 4 years with a 1-year cliff) |
| Retention bonus, relocation, notice buyout | Negotiable extras |
In-hand (take-home) = fixed monthly gross − employee PF (12% of basic) − professional tax (state-dependent, e.g. ₹200/month in several states) − income tax (TDS). Ask HR for the CTC breakup and calculate in-hand under the new vs old tax regime.
Typical hike expectations when switching in Indian IT vary widely with skills, demand and company type — research rather than assume a fixed percentage.