Your CTC (Cost to Company) is what you cost your employer in a year. It is not what reaches your bank account. CTC includes items you never receive as monthly cash, such as the employer’s PF contribution, gratuity and variable pay that depends on performance. Monthly salary also has deductions taken out: employee PF, professional tax and income tax (TDS). This calculator works through those steps to estimate your monthly in-hand (take-home) salary.
How to use the salary calculator
- Annual CTC: the figure on your offer letter.
- Variable / bonus in CTC: the performance-linked part, usually paid yearly or quarterly. It is excluded from the monthly figure.
- Basic salary (% of CTC): commonly 40–50% of CTC. Check your salary break-up. Basic drives PF and gratuity.
- PF contribution: most private employers cap PF at 12% of ₹15,000 (₹1,800 a month). Some contribute 12% of the full basic.
- Professional tax: a state tax, up to ₹2,500 a year. It is about ₹200 a month in Maharashtra, Karnataka, West Bengal and others, and nil in states such as Delhi, Haryana and Uttar Pradesh.
- Choose whether to include income tax (new regime) and press Calculate.
From CTC to in-hand: the steps
In-hand salary = Gross salary − employee PF − professional tax − income tax (TDS)
- Employer PF: your employer puts 12% of basic (or of ₹15,000 if capped) into your EPF account. It is part of your CTC, but it goes to your retirement savings, not your bank account.
- Gratuity: often included in CTC at 4.81% of basic. It is paid only when you leave after at least 5 years of continuous service.
- Employee PF: an equal 12% is deducted from your gross salary every month. It is still your money, saved in EPF at the rate the EPFO declares each year.
- Income tax: your employer deducts estimated tax evenly across the year based on the regime you choose and the investments you declare.
Worked example: CTC ₹12 lakh
Assumptions: 10% variable pay, basic 40% of CTC, PF capped at ₹1,800 a month, professional tax ₹200 a month, new tax regime.
| Component (annual) | Amount |
|---|---|
| CTC | ₹12,00,000 |
| − Variable pay (10%) | ₹1,20,000 |
| − Employer PF (₹1,800 × 12) | ₹21,600 |
| − Gratuity (4.81% of ₹4.8 L basic) | ₹23,088 |
| Gross salary | ₹10,35,312 |
| − Employee PF | ₹21,600 |
| − Professional tax | ₹2,400 |
| − Income tax (taxable ₹10.8 L, nil after 87A rebate) | ₹0 |
| Net take-home | ₹10,11,312 ≈ ₹84,276/month |
The variable pay of ₹1.2 lakh arrives separately when it is paid out, minus any tax due on it.
Typical in-hand salary by CTC
Using the same assumptions as above:
| Annual CTC | Monthly gross | Monthly in-hand (approx.) | Income tax / year |
|---|---|---|---|
| ₹6 lakh | ₹42,238 | ₹40,238 | ₹0 |
| ₹12 lakh | ₹86,276 | ₹84,276 | ₹0 |
| ₹20 lakh | ₹1,44,993 | ₹1,29,547 | ≈ ₹1.61 lakh on fixed pay |
Real figures vary with your company’s structure. Meal cards, NPS, reimbursements and HRA all change the result.
Common salary components explained
| Component | What it is | Taxable? |
|---|---|---|
| Basic salary | Core fixed pay; basis for PF, gratuity and HRA | Fully taxable |
| HRA | House rent allowance | Partly exempt in the old regime if you pay rent; fully taxable in the new regime |
| Special allowance | Balancing figure that makes up the CTC | Fully taxable |
| LTA | Leave travel allowance | Exempt for 2 journeys in 4 years (old regime only) |
| Employer NPS (80CCD(2)) | Employer contribution to NPS | Deductible up to 14% of basic in the new regime |
| Performance bonus | Variable pay | Taxable when paid |
How to increase your take-home pay legally
- Choose the right tax regime. Compare both in the Income Tax Calculator before you submit your declaration to HR.
- Ask for employer NPS. Under the new regime, employer NPS contributions up to 14% of basic are tax-free, so the same CTC gives you more after tax.
- Check the PF basis. If PF is on your full basic, ask whether it can be capped at ₹15,000. That raises cash in hand, but you save less for retirement, so weigh it carefully.
- Use tax-free reimbursements such as phone, internet or books, if your employer offers them.
Frequently asked questions
How do I calculate in-hand salary from CTC?
Subtract variable pay, employer PF and gratuity from CTC to get gross salary. Then subtract employee PF, professional tax and income tax. For a ₹12 lakh CTC with typical assumptions, in-hand pay is about ₹84,000 a month.
What is the in-hand salary for 12 LPA?
About ₹82,000–₹86,000 a month under the new tax regime, depending on variable pay, PF basis and professional tax. Fixed income up to ₹12.75 lakh pays no income tax under the new regime.
Is employer PF part of my CTC?
Usually, yes. Most private companies include the employer’s 12% PF contribution in CTC. It is not paid to you monthly but goes into your EPF account, where it earns interest.
Why is my first month’s salary different?
Your first salary is usually pro-rated for the days you worked. Later months can differ when TDS is adjusted after you submit investment proofs, typically in January–March.
What is the difference between gross and net salary?
Gross salary is your total monthly earnings before deductions. Net (in-hand) salary is what is credited after employee PF, professional tax and TDS are deducted.