#indiawork

Here's something most employees discover way too late:

Your CTC includes two PF contributions and neither one reaches your salary account.

Let's break it down with a real example.

Your CTC: ₹10,00,000/year Basic salary: ₹4,00,000/year (40% of CTC) What's happening Amount/year Your PF contribution (12% of basic)₹48,000- deducted from your gross Employer's PF contribution (12% of basic)₹48,000- added to CTC, goes to your PF account Total PF in your CTC₹96,000

That's ₹96,000 in your ₹10L CTC that never goes into your bank account.

On top of that, gratuity provision (roughly ₹23,000/year on this salary) is also part of your CTC and you only receive it if you stay for 5 continuous years.

So your "₹10 lakh CTC" might actually mean:

₹10,00,000 CTC

minus employer PF (₹48,000)

minus gratuity provision (₹23,000)

= ~₹9,29,000 gross salary

minus your PF deduction (₹48,000)

minus income tax (varies)

minus professional tax (₹2,400)

= ₹6.8L–₹7.2L in-hand per year

That's ₹57,000–₹60,000/month in hand. Not ₹83,333.

This isn't a scam. It's just how CTC is structured and most companies don't explain it clearly at the offer stage.

You got a ₹12 lakh CTC offer. You did the math. ₹1 lakh a month, right?

Your first payslip says ₹72,000.

Nobody lied to you. But nobody explained it either. Here's what's actually happening:

1. Your employer's PF contribution is in your CTC — but never touches your bank account

Your employer contributes 12% of your basic salary to your Provident Fund. That money goes directly into your PF account, not your salary. But it's counted in your CTC. So you're "earning" it — just not spending it anytime soon.

2. Gratuity is included in your CTC even though you can only claim it after 5 years

Every month, a gratuity provision sits in your CTC. Leave before 5 years? You forfeit every rupee of it. That's typically ₹30,000–₹50,000/year in your CTC that has conditions attached — and most people don't find out until they resign at year 3.

3. Your own PF deduction (12% of basic) is taken from your gross salary

Not only is your employer's PF in your CTC — your own 12% contribution is deducted from your gross before you see anything. That's two PF hits eating into the headline number.

4. "Special allowance" is just a filler component — and it's fully taxable

When the numbers don't add up to your CTC, companies add a "special allowance" to bridge the gap. It has zero tax exemption. It exists to make the CTC number look bigger.

5. Variable pay assumes 100% performance — yours might not

If 20% of your CTC is variable, that ₹12L assumes you hit every target. Miss them? Your real CTC was always ₹9.6L.

The CTC number is a cost calculation, not a salary promise.

Before you accept your next offer, break it down component by component — basic, HRA, PF, gratuity, variable, and special allowance. Know exactly what hits your account and what doesn't.