Gross Salary

What Is Gross Salary?

Gross salary is the total amount an employee earns before deductions. It includes basic salary plus all allowances and bonuses but excludes employer-side contributions like employer PF and employer ESI. It sits between CTC (Cost to Company) and net salary (take-home pay) in the Indian salary structure hierarchy.

Gross Salary vs CTC vs Net Salary

Component	What It Includes
CTC	Gross salary + employer PF + employer ESI + gratuity + other employer costs
Gross Salary	Basic + HRA + LTA + DA + special allowances + bonuses
Net Salary	Gross salary − employee PF − employee ESI − professional tax − TDS

Typical Components of Gross Salary

For an employee with a CTC of ₹12,00,000 per annum, a typical gross salary breakdown looks like:

Component	Monthly (₹)	Annual (₹)	% of Gross
Basic Salary	40,000	4,80,000	50%
HRA	16,000	1,92,000	20%
LTA	5,000	60,000	6.25%
Special Allowance	15,000	1,80,000	18.75%
Performance Bonus	4,000	48,000	5%
Gross Salary	80,000	9,60,000	100%

The remaining ₹2,40,000 of CTC goes toward employer PF (₹1,80,000 at 12% of basic + DA), employer ESI (if applicable), and gratuity provision.

How Gross Salary Is Calculated

Gross Salary = CTC − Employer PF − Employer ESI − Gratuity − Other Employer Costs

Alternatively:

Gross Salary = Basic Salary + HRA + LTA + DA + Special Allowance + Bonuses + Other Allowances

Key Points About Gross Salary in India

• Basic salary typically constitutes 40–50% of gross salary. Setting it higher increases PF and gratuity liability.
• HRA is usually 40–50% of basic (50% for metro cities, 40% for non-metro).
• Special allowance is a flexible component used to balance the structure—it is fully taxable.
• Statutory bonus under the Payment of Bonus Act applies to employees earning up to ₹21,000/month gross.
• Gross salary appears on the monthly payslip and Form 16 Part B as “Gross Salary” under Section 17(1).

How Omnivoo Handles Gross Salary

Omnivoo’s payroll engine automatically structures gross salary based on the CTC configured by the employer:

• Salary structuring: When onboarding an employee, Omnivoo breaks down CTC into optimally tax-efficient components while maintaining compliance with PF and ESI wage thresholds.
• Payslip generation: Monthly payslips clearly show gross salary, all component breakdowns, and deductions applied.
• Flexible allowances: Employers can configure custom allowance splits within the gross salary while Omnivoo ensures statutory minimums (e.g., basic ≥ 50% under new labour codes) are met.
• Automatic recalculation: When salary revisions occur, Omnivoo recalculates all components and adjusts arrears automatically.