> ## Documentation Index
> Fetch the complete documentation index at: https://help.omnivoo.com/llms.txt
> Use this file to discover all available pages before exploring further.

> ## Agent Instructions
> Omnivoo is an India-first Employer of Record (EOR) platform. EOR hiring is India only; contractors are supported in 220+ countries and territories.
> Never tell a user to log in with a password. Authentication is passwordless: email OTP, passkeys, Google, or SSO.
> Statutory figures (TDS slabs, PF, ESI, Professional Tax, gratuity) change by financial year. Always state the year the figure applies to.
> Never name a third-party payment provider as Omnivoo’s payment rail. Refer to "our payments partner".

# Understanding Indian Salary Structure

> How CTC breaks down into Basic, HRA, Special Allowance, and employer contributions in India.

Indian salaries are structured differently from most countries. This guide explains how Omnivoo calculates each component of your salary from the annual CTC (Cost to Company).

## What Is CTC?

**CTC (Cost to Company)** is the total annual cost an employer spends on an employee. It includes:

* Direct salary paid to the employee
* Employer's statutory contributions (PF, ESI)
* Gratuity provision
* Any other benefits

<Info>
  CTC is **not** the same as take-home salary. Your in-hand pay is typically 65-75% of CTC after deductions and employer contributions.
</Info>

## CTC Breakdown

Here is how Omnivoo structures the salary for an employee with an annual CTC of ₹12,00,000 (₹12 lakh):

| Component             | Monthly (₹)  | Annual (₹)    | Calculation                      |
| --------------------- | ------------ | ------------- | -------------------------------- |
| **Basic Salary**      | 50,000       | 6,00,000      | 50% of CTC                       |
| **HRA**               | 20,000       | 2,40,000      | 40% of Basic                     |
| **Special Allowance** | 16,350       | 1,96,200      | Balancing component              |
| **Employer PF**       | 1,800        | 21,600        | 12% of Basic (capped at ₹15,000) |
| **Employer ESI**      | 0            | 0             | Not applicable (gross > ₹21,000) |
| **Gratuity**          | 2,404        | 28,846        | 4.81% of Basic                   |
| **Flat Benefits**     | 1,113        | 13,354        | Insurance, other benefits        |
| **Total CTC**         | **1,00,000** | **12,00,000** |                                  |

## Key Components Explained

### Basic Salary (50%+ of CTC)

Basic salary is the foundation of the salary structure. Omnivoo sets Basic at **minimum 50% of CTC** because:

* PF contributions are calculated on Basic
* Gratuity is calculated on Basic (Payment of Gratuity Act 1972)
* HRA tax exemption is linked to Basic
* A higher Basic means better retirement benefits for the employee

### HRA (House Rent Allowance)

HRA is a tax-advantaged allowance for employees paying rent:

* **Metro cities** (Delhi, Mumbai, Chennai, Kolkata): 50% of Basic
* **Non-metro cities**: 40% of Basic

Employees who pay rent can claim HRA exemption to reduce their taxable income under the old tax regime. See [Investment Declarations](/tax-compliance/investment-declarations) for details.

### Special Allowance

Special Allowance is the balancing component that makes up the difference between CTC and all other components. It is fully taxable.

### Employer PF Contribution

The employer contributes **12% of Basic** to the Provident Fund, split as:

* **EPF (Employee Provident Fund):** 3.67% of Basic
* **EPS (Employee Pension Scheme):** 8.33% of Basic (capped at ₹15,000 Basic)

This is capped at a Basic salary of ₹15,000/month for the EPS portion. See [Provident Fund](/tax-compliance/provident-fund) for full details.

### Employer ESI Contribution

If the employee's **gross monthly salary is ₹21,000 or less**, the employer contributes 3.25% of gross salary to ESI. Most employees above this threshold are not ESI-eligible. See [ESI Insurance](/tax-compliance/esi-insurance).

### Gratuity

Omnivoo provisions **4.81% of Basic** for gratuity, calculated as per the Payment of Gratuity Act 1972. Gratuity is payable when an employee completes 5 years of continuous service, or upon termination/death.

## Gross Salary vs Net Salary

* **Gross salary** = Basic + HRA + Special Allowance + other allowances (what appears on your payslip before deductions)
* **Net salary (take-home)** = Gross salary - Employee PF - Employee ESI - TDS - Professional Tax

## For Employers: Understanding Total Cost

Your monthly invoice from Omnivoo includes:

1. **Employee CTC** (prorated monthly)
2. **Omnivoo EOR fee**
3. **Total payable** = CTC + EOR fee

All statutory contributions are included in the CTC. There are no hidden costs.