Does CTC include employer PF?

Yes. The employer contribution of 12% of basic is part of CTC even though it is deposited into your EPF account rather than paid to you monthly.

Is gratuity part of CTC?

Many companies, including most IT services firms, include a gratuity provision of 4.81% of basic in CTC. You only receive it after five years of service.

CTC full form: cost to company, and what it includes

CTC stands for cost to company: the total amount an employer spends on you in a year, including your gross salary, the employer share of provident fund, any gratuity provision, insurance premiums and sometimes the value of perks. It is always higher than what reaches your bank account.

FY 2026-27 figures, rules verified 3 Sep 2026. Numbers assume basic at 40% of CTC, employer PF inside CTC and ₹2,400 professional tax unless stated.

A typical CTC has three layers. Fixed pay is basic, HRA and other allowances. Retirals are employer PF (12% of basic) and gratuity (4.81% of basic). Variable pay is a bonus or performance component that is paid quarterly or annually, if at all.

The monthly credit is gross salary minus income tax, your own 12% EPF and professional tax. Employer PF and gratuity never appear in the monthly credit, which is why a 12 LPA CTC pays roughly ₹90,200 a month rather than ₹1,00,000.

When comparing two offers, compare fixed pay and the in hand figure, not the CTC headline. A package that moves money from fixed to variable or adds a notional insurance premium can raise CTC without raising what you take home.

See the figure for your own salary on the in hand calculator.

Questions

Related terms

CTC vs gross vs in hand — CTC is what the company spends, gross is CTC minus the employer's PF and gratuity contributions, and in hand is gross minus income tax, your own EPF and professional tax.
Basic salary — Basic salary is the fixed core of your pay on which provident fund, gratuity and HRA exemption are calculated, typically 40% to 50% of CTC in India.
Variable pay — Variable pay is the performance-linked part of CTC, usually 5% to 20% of the package, paid quarterly or annually rather than monthly and often at less than 100% of target.