Convert your annual CTC into your monthly take-home salary.
Why is in-hand salary lower than CTC?
CTC (Cost to Company) is everything your employer spends on you, including amounts you don't receive every month:
- Employer PF – 12% of basic goes into your EPF account (often capped at ₹1,800/month).
- Gratuity – about 4.81% of basic, paid only when you leave after 5+ years of service.
- Employee PF – another 12% of basic is deducted from your salary for your EPF account.
- Professional tax – a state tax, up to ₹2,500 a year (₹200/month in most states; nil in some).
- Income tax (TDS) – deducted monthly based on your expected yearly tax.
Assumptions
Tax is calculated under the new tax regime for FY 2025-26, with the ₹75,000 standard deduction and the section 87A rebate (no tax up to ₹12 lakh taxable income), plus 4% cess. Bonuses, variable pay and reimbursements are treated as part of the regular salary. Use the income tax calculator to compare with the old regime.
Frequently asked questions
What percentage of CTC is basic salary?
Basic salary is usually 35–50% of CTC. A higher basic means higher PF deductions and gratuity (so lower monthly in-hand pay) but more long-term savings. Many allowances, such as HRA, are calculated as a percentage of basic.
Is the variable or performance bonus part of my in-hand salary?
Usually not monthly. Variable pay is part of CTC but is paid quarterly or yearly, and only according to performance. When comparing job offers, look at the fixed component and the monthly in-hand pay this calculator shows.
Which tax regime should a salaried employee choose?
The new regime is the default and is better for most people: with the ₹75,000 standard deduction, salary up to ₹12.75 lakh is effectively tax-free. The old regime can be better only if you have large deductions such as HRA, home loan interest, 80C and 80D. Compare both with the income tax calculator.
Why is more tax deducted from my salary in January–March?
Employers estimate your tax at the start of the year based on your declarations. When you submit actual proofs in January, any deductions that can't be proved are removed, and the extra tax is recovered in the last few months. Submitting proofs on time keeps TDS even.
What is the difference between gross salary and net salary?
Gross salary is your monthly pay before deductions: basic, HRA and allowances. Net (in-hand) salary is what reaches your bank account after employee PF, professional tax and income tax. CTC is larger than gross because it also includes employer PF and gratuity.