Your offer letter says one number; your bank account shows another. This calculator turns your Cost to Company (CTC) into the salary that actually lands in your account every month, after Provident Fund, gratuity, professional tax and income tax for FY 2026-27 (AY 2027-28).
How to use the calculator
- Annual CTC – the total package from your offer letter.
- Basic salary % – usually 40–50% of CTC. Under the new labour codes, wages (basic + DA + retaining allowance) must be at least 50% of total pay, so many companies now use 50%.
- PF – most private employers cap PF at 12% of ₹15,000 (₹1,800 a month). Some contribute 12% of your full basic.
- Gratuity – if your CTC breakup lists gratuity, keep “Yes”. It is 4.81% of basic and is paid only when you leave after becoming eligible.
- Professional tax – ₹200 a month in most states that levy it (capped at ₹2,500 a year).
- Tax regime – the new regime is the default. Switch to the old regime to enter 80C, HRA and other deductions.
How CTC becomes in-hand salary
CTC includes amounts that never reach your bank account each month:
- Employer PF – goes to your EPF account, not your salary.
- Gratuity – a future benefit.
- Sometimes insurance premiums, meal cards or variable pay – if your bonus is part of CTC, remove it from the CTC you enter to see your fixed monthly pay.
What is left is your gross salary. From that, your employer deducts your own PF contribution, professional tax and income tax (TDS). The remainder is your in-hand pay.
Income tax used (FY 2026-27)
| New regime taxable income | Rate |
|---|---|
| Up to ₹4,00,000 | Nil |
| ₹4,00,001 – ₹8,00,000 | 5% |
| ₹8,00,001 – ₹12,00,000 | 10% |
| ₹12,00,001 – ₹16,00,000 | 15% |
| ₹16,00,001 – ₹20,00,000 | 20% |
| ₹20,00,001 – ₹24,00,000 | 25% |
| Above ₹24,00,000 | 30% |
Salaried people get a ₹75,000 standard deduction in the new regime, and a rebate makes tax zero when taxable income is up to ₹12 lakh. In practice, a salaried person with gross salary up to ₹12.75 lakh pays no income tax. A 4% health and education cess applies on top of tax.
Worked example
A ₹12 lakh CTC with 50% basic, capped PF and gratuity included works out like this: basic ₹6,00,000; employer PF ₹21,600; gratuity ₹28,860; gross salary ₹11,49,540. After the ₹75,000 standard deduction, taxable income is ₹10,74,540 – below ₹12 lakh, so tax is nil. Subtract employee PF (₹21,600) and professional tax (₹2,400), and take-home is about ₹11.26 lakh a year, or roughly ₹93,800 a month.
Tips to increase your in-hand salary
- Ask for capped PF if your employer contributes on full basic and you would rather have cash now (you lose some retirement savings).
- Use employer NPS – under the new regime, your employer’s NPS contribution up to 14% of basic is deductible.
- Compare regimes every year – if your HRA, home-loan interest and 80C together are large, the old regime can still win. Try our new vs old regime tax calculator.
In-hand salary for common CTC levels (FY 2026-27)
The table below uses the calculator’s defaults – basic at 50% of CTC, PF capped at ₹1,800 a month, gratuity included in CTC, ₹200 monthly professional tax and the new tax regime. Use it as a quick reference, then enter your own breakup above for an exact figure.
| Annual CTC | Gross salary | Income tax | Monthly in-hand |
|---|---|---|---|
| ₹4,00,000 | ₹3,68,780 | ₹0 | ≈ ₹28,700 |
| ₹6,00,000 | ₹5,63,970 | ₹0 | ≈ ₹45,000 |
| ₹8,00,000 | ₹7,59,160 | ₹0 | ≈ ₹61,300 |
| ₹10,00,000 | ₹9,54,350 | ₹0 | ≈ ₹77,500 |
| ₹12,00,000 | ₹11,49,540 | ₹0 | ≈ ₹93,800 |
| ₹15,00,000 | ₹14,42,325 | ≈ ₹88,500 | ≈ ₹1,10,800 |
| ₹20,00,000 | ₹19,30,300 | ≈ ₹1.78 lakh | ≈ ₹1,44,000 |
| ₹30,00,000 | ₹29,06,250 | ≈ ₹4.47 lakh | ≈ ₹2,03,000 |
Notice the jump in tax between ₹12 lakh and ₹15 lakh CTC. Once taxable income crosses ₹12 lakh, the rebate disappears (with marginal relief for the first few thousand rupees) and every slab above ₹4 lakh is taxed. That’s why two offers that look close on paper can feel very different in your bank account.
A typical CTC breakup explained
Most offer letters split CTC into the components below. Knowing what each one does helps you ask the right questions during negotiation.
- Basic salary – the foundation. PF, gratuity and HRA are all calculated from it. A higher basic means bigger retirement savings but slightly lower take-home today.
- House Rent Allowance (HRA) – usually 40–50% of basic. It is fully taxable in the new regime, but partly exempt in the old regime if you pay rent.
- Special / flexible allowance – the balancing figure that makes the numbers add up. It is fully taxable.
- Leave travel allowance, meal cards, telephone and fuel reimbursements – tax-efficient mainly in the old regime, and only when you submit bills.
- Employer PF and gratuity – part of CTC but not part of monthly pay.
- Variable pay or performance bonus – often 10–20% of CTC for mid-level roles. It depends on company and personal ratings, so treat it as uncertain.
- Insurance premiums – some companies include the cost of group health or term cover in CTC.
How to calculate in-hand salary by hand
- Start with fixed CTC (CTC minus variable pay).
- Subtract employer PF and gratuity to get gross salary.
- Subtract the standard deduction (₹75,000 in the new regime) to get taxable income, then apply the slab rates and add 4% cess. If taxable income is ₹12 lakh or less, tax is zero.
- From gross salary, subtract employee PF, professional tax and income tax.
- Divide by 12 for the monthly figure.
Common mistakes when comparing offers
- Counting joining bonuses as salary. They are one-time and often have a clawback clause if you leave within a year.
- Ignoring the basic percentage. Two ₹15 lakh offers with 30% and 50% basic produce different PF, gratuity and (in the old regime) HRA exemption.
- Forgetting ESOP or RSU vesting schedules. Stock is taxed as salary when it vests, which can raise your TDS in that month.
- Not checking the notice period and buyout rules – they can delay your start date and cost money. See the notice period calculator.
Frequently asked questions
Is professional tax charged in every state?
No. States such as Karnataka, Maharashtra, West Bengal, Tamil Nadu, Telangana and Gujarat levy it, while Delhi, Haryana, Uttar Pradesh and Rajasthan do not. If your state doesn’t charge it, set professional tax to ₹0.
Does employer PF count as taxable income?
Employer contributions to PF, NPS and superannuation are tax-free up to a combined ₹7.5 lakh a year. Above that, the excess (and interest on it) becomes taxable – this only affects very high earners.
Why is my in-hand salary so much lower than CTC ÷ 12?
Because CTC counts employer PF, gratuity and sometimes variable pay and insurance. None of these are paid with your monthly salary.
Is variable pay included in in-hand salary?
Not monthly. Bonuses are usually paid quarterly or yearly and taxed when paid. Enter only your fixed CTC to see regular monthly pay.
Does this calculator include HRA exemption?
Only in the old regime. Work out your exemption with the HRA exemption calculator and enter it in the deductions field.
This calculator gives an estimate. Your payslip can differ because of company-specific allowances, reimbursements, LWF, or mid-year joining.