Your offer letter says “CTC ₹10 lakh”, but your first salary credit is much smaller. That's because CTC (Cost to Company) is everything your employer spends on you, not what lands in your bank account. Here's how to work out your real take-home pay.
What's inside your CTC
- Basic salary — usually 40–50% of CTC. Many other parts are calculated from it.
- HRA and allowances — house rent allowance, special allowance and others make up most of the rest.
- Employer PF — 12% of basic paid into your EPF account (sometimes capped at ₹1,800 a month).
- Gratuity — about 4.81% of basic, paid only when you leave after five or more years.
- Variable pay or bonus — paid only if targets are met; often paid yearly.
What gets deducted from your salary
- Employee PF — another 12% of basic.
- Professional tax — a state tax of up to ₹2,500 a year.
- Income tax (TDS) — deducted monthly based on your expected annual tax.
Worked example: 10 LPA
Assume basic is 50% of CTC, full PF, gratuity included in CTC, and the new tax regime:
| Step | Yearly | Monthly |
|---|---|---|
| CTC | ₹10,00,000 | ₹83,333 |
| − Employer PF (12% of basic) | ₹60,000 | ₹5,000 |
| − Gratuity (4.81% of basic) | ₹24,050 | ₹2,004 |
| = Gross salary | ₹9,15,950 | ₹76,329 |
| − Employee PF | ₹60,000 | ₹5,000 |
| − Professional tax | ₹2,400 | ₹200 |
| − Income tax (new regime) | ₹0 | ₹0 |
| = In-hand salary | ₹8,53,550 | ₹71,129 |
Because taxable income after the ₹75,000 standard deduction is under ₹12 lakh, income tax is zero under the new regime. Your monthly take-home is about ₹71,129 — roughly 85% of CTC.
How to take home more
- Ask whether PF can be calculated on the statutory ₹15,000 wage ceiling (₹1,800 a month) instead of your full basic.
- Compare tax regimes — if you pay rent and have a home loan, the old regime might reduce TDS.
- Remember that PF isn't lost: it's your own savings, earning tax-free interest.
Calculate your own package with the salary calculator, or see in-hand salary for every CTC.