CTC to In-Hand Salary Calculator

Why CTC and take-home are so far apart

CTC is what the role costs the company. It includes money that never reaches you monthly: the employer's own provident fund contribution, and gratuity, which accrues but is paid only when you leave after the qualifying period.

Your take-home is what remains after those are removed, after your own PF contribution and professional tax are deducted, and after income tax is withheld at source. On a mid-range Indian salary that easily accounts for a fifth of the headline figure.

This is why an offer that reads as a large number can feel disappointing on the first of the month. The structure matters as much as the total.

The components, and what they mean for you

Basic salary is the anchor: provident fund, gratuity and often HRA are all calculated as a percentage of it. Employers commonly set it between 40% and 50% of CTC. A low basic reduces PF deductions in the short term and your retirement corpus in the long term — it is a trade, not a free gain.

HRA is part of your salary and can reduce taxable income if you actually rent a home, subject to the exemption rules. Special allowance is the balancing figure and is fully taxable. A joining bonus is usually paid once — it inflates the first year and disappears from the second.

Variable pay, performance bonus and stock are not monthly salary at all. Treat them as a separate question: what is the fixed component, and what is the monthly number I can rely on?

Deductions you should expect to see

Provident fund appears twice on your payslip — once as your contribution and once as your employer's. Only yours reduces your take-home; the employer's is part of CTC. Where basic exceeds the statutory ceiling, many employers cap the contribution and some do not, which changes the number materially.

Professional tax is levied by the state, so the amount varies and several states charge nothing. Income tax is withheld at source based on the regime you chose, and your employer will ask you to declare it.

Health insurance premiums are sometimes deducted, often for dependants. If the employer bears the cost it forms part of CTC instead.

Old regime, new regime

India offers two income tax regimes and you choose between them. The new regime has lower slab rates but gives up most exemptions and deductions; the old one has higher rates but allows you to claim HRA, home loan interest, and investment-linked deductions.

The right choice depends on how much you actually claim. An employee with a large home loan and substantial tax-saving investments can be better off under the old regime; someone with few deductions is almost always better off under the new one.

This calculator uses the new regime because it is the default and the one most applicants are placed on. If you have significant deductions, run both before you decide.

Terms used on this page

CTC

Cost to Company — the total annual amount the employer spends on you, including contributions and benefits that are never paid monthly.

Gross salary

Your salary before deductions but after removing employer PF and gratuity from CTC. Income tax and PF are deducted from this.

Net / in-hand salary

What reaches your bank account after every deduction.

Basic salary

The fixed anchor component, usually 40–50% of CTC. PF, gratuity and often HRA are calculated from it.

HRA

House Rent Allowance — part salary, part potential tax exemption if you genuinely pay rent.

Gratuity

A lump sum payable on leaving after the qualifying period of continuous service. Accrues monthly but is not paid monthly.

Professional tax

A state-level tax on employment. The amount, and whether it applies at all, depends on the state.

TDS

Tax Deducted at Source — income tax withheld from each payslip rather than paid in a lump at year end.

Variable pay

Performance-linked pay, paid on meeting a target or at the employer's discretion. Not part of monthly salary.

Standard deduction

A flat deduction applied to salary income before tax is computed, regardless of actual expenses.