About Salary Calculator
Your CTC (Cost to Company) is not what reaches your bank account. Employer PF contributions, gratuity, professional tax, and income tax are all deducted along the way. This calculator breaks a CTC figure down into gross pay, deductions, and in-hand monthly salary under Indian payroll rules.
How to use
- Enter your annual CTC.
- Adjust the basic salary percentage if your structure differs from the default.
- Review the PF, professional tax, and income tax deductions.
- Read your estimated monthly take-home pay.
CTC, gross and in-hand are three different numbers
Cost to Company is exactly what the name says: everything your employer spends on you in a year. That includes money you never see as cash, such as their share of provident fund, the gratuity they set aside, and often insurance premiums.
Gross salary is what remains once those employer-side costs are removed — the figure your payslip starts from. In-hand pay is what survives after your own provident fund contribution, professional tax and income tax are deducted from gross.
The gap between the headline CTC in an offer letter and the money arriving in your account each month commonly runs to a fifth or more. When comparing two offers, compare in-hand figures rather than CTC, because two identical CTCs can produce noticeably different take-home pay depending on how the structure is arranged.
What the components actually do
Basic salary anchors everything else. Provident fund, gratuity and often HRA are all calculated as a proportion of basic, so a structure with a low basic increases immediate cash flow while reducing long-term retirement savings.
House Rent Allowance can be partly exempt from tax if you genuinely pay rent, with the exempt amount depending on your basic, the rent paid and whether you live in a metro city. Claiming it requires rent receipts and, above an annual threshold, your landlord's PAN.
Special allowance is usually the balancing figure that makes the structure add up, and it is fully taxable. Gratuity is a statutory payment that becomes payable after five years of continuous service, which is why it sits in CTC long before you can access it.
Choosing between the tax regimes
The newer regime offers lower slab rates but strips out most exemptions and deductions. The older regime keeps higher rates alongside allowances such as HRA, section 80C investments, and home loan interest relief.
Which one leaves you better off depends entirely on how much you actually claim. Someone paying significant rent with a home loan and full 80C investments often does better under the old regime; someone with few deductions usually does better under the new one.
Run the numbers both ways using your real deductions rather than assuming, and note that the default regime and the slab thresholds have been revised repeatedly — always check the position for the current assessment year.
Frequently asked questions
Why is my in-hand salary lower than my CTC?
CTC includes costs the employer bears that never reach you as cash, such as their PF contribution and gratuity provision. Your own PF share, professional tax, and income tax are then deducted from gross pay.
How much PF is deducted?
Employees contribute 12% of basic salary plus dearness allowance, and the employer matches it. The employee share is deducted from your salary; the employer share sits inside your CTC.
Should I choose the old or new tax regime?
The new regime offers lower slab rates but removes most exemptions. It usually favours those with few deductions, while the old regime suits people claiming significant HRA, 80C, and home loan benefits. Compare both against your actual deductions.