Salary
Salary Calculator
A CTC figure is not what lands in your bank account. Enter your annual cost to company to estimate monthly in-hand pay after provident fund, gratuity, professional tax and income tax, under either the new or the old regime.
How to use this calculator
- Enter your annual CTC from the offer letter.
- Set basic pay as a percentage of CTC; your offer letter or payslip will show it, and 40% to 50% is common.
- Choose the tax regime you have opted for.
- Adjust PF treatment, gratuity and professional tax if your employer handles them differently.
Formula
In-hand = CTC − Employer PF − Gratuity − Employee PF − Professional tax − Income tax − Other deductions
- Employer PF
- employer's provident fund contribution, part of CTC but not paid to you monthly
- Gratuity
- provision of about 4.81% of basic pay, payable only after five years of service
- Employee PF
- your own 12% contribution, deducted from gross salary
- Income tax
- tax on taxable income after the applicable regime's deductions, plus 4% cess
Gross salary is CTC minus employer PF and gratuity. Take-home is gross salary minus your deductions.
Worked example
A CTC of ₹12,00,000 with basic at 50%, PF capped at the ₹15,000 wage ceiling, gratuity included, and the new regime.
- Basic pay50% of 12,00,000 = ₹6,00,000
- Employer PF12% of ₹15,000 × 12 = ₹21,600
- Gratuity provision4.81% of 6,00,000 = ₹28,860
- Gross salary12,00,000 − 21,600 − 28,860 = ₹11,49,540
- Employee PF₹21,600
Gross salary is about ₹11,49,540 a year. After PF, professional tax and income tax under the new regime, monthly in-hand pay works out to roughly ₹86,000. Enter your own numbers above for a figure specific to your offer.
Why CTC and take-home differ so much
CTC is everything your employer spends on you in a year. Several parts of it never reach your monthly account: the employer's provident fund contribution goes into your PF account, gratuity is a provision you only receive after five years of service, and some companies include insurance premiums or meal card values.
What remains is gross salary. From that, your own PF share, professional tax and income tax are deducted before the balance is paid to you.
How provident fund is calculated
The statutory rule is 12% of basic pay plus dearness allowance from the employee and a matching 12% from the employer, but employers differ on how they apply the ₹15,000 monthly wage ceiling. Some restrict PF to 12% of ₹15,000, which is ₹1,800 a month. Others calculate 12% of your full basic pay, which increases both contributions and lowers take-home further.
Use the provident fund option above to match whichever approach your employer follows. Your own contribution reduces take-home pay but is still your money; it earns interest and is withdrawable under the scheme's rules.
New regime and old regime
The new regime has wider slabs and lower rates but almost no exemptions. The old regime has higher rates but allows HRA exemption, deductions under Section 80C, 80D and others. Which one leaves you better off depends entirely on how much you can legitimately claim.
If you have a home loan, pay significant rent, and use the full 80C limit, the old regime can still win. If you claim little, the new regime is usually simpler and cheaper. Run the calculator both ways with your actual deduction figures before deciding.
Professional tax
Professional tax is levied by state governments, not the centre. States that charge it generally cap it at ₹2,500 a year, and several states do not levy it at all. Enter the figure that appears on your payslip, or zero if your state does not charge it.
Things to keep in mind
- This is an estimate for planning, not an official Income Tax Department or payroll calculation.
- It assumes a resident individual below 60 whose only income is salary, and no mid-year job change.
- Variable pay, bonuses and joining bonuses are taxed when paid and can change your monthly TDS considerably.
- Your employer computes TDS from your investment declarations, so the monthly deduction may vary through the year.
Frequently asked questions
Why is my in-hand salary so much lower than CTC divided by twelve?
Because CTC includes amounts you never receive monthly, such as the employer's PF contribution and the gratuity provision, and because PF, professional tax and income tax are deducted from what remains. On a ₹12 lakh CTC the gap is often ₹14,000 or more per month.
Should I choose the new or the old tax regime?
It depends on your deductions. The new regime has lower rates and a higher rebate threshold but almost no exemptions; the old regime rewards rent, home loan interest and 80C investments. Calculate both with your real figures rather than following a rule of thumb.
Does a higher basic pay increase or reduce take-home?
A higher basic pay usually reduces monthly take-home, because PF and gratuity are both calculated on basic. It also increases your retirement savings and gratuity entitlement, so it is not simply a loss.
Which tax year does this calculator use?
It uses the income tax slabs for Tax Year 2026-27. The rules are stored separately from the calculator so they can be updated quickly after each Budget.
Related articles
- CTC versus in-hand salary: where the money goesA line-by-line explanation of why a ₹12 lakh CTC does not mean ₹1 lakh a month, covering PF, gratuity, professional tax and income tax.1 min read
- Old or new tax regime: which one fits youThe new regime has lower rates, the old one has deductions. Here is how to work out which leaves you with more, using your own numbers.1 min read
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