Salary Calculator
Break down your CTC into Basic, HRA, PF, Gratuity and other components. Calculate your monthly in-hand salary.
What is CTC (Cost to Company)?
CTC (Cost to Company) is the total amount an employer spends on an employee annually. It includes not just the salary you receive, but also employer contributions to PF, gratuity, insurance premiums, and other benefits. Your actual in-hand salary is always lower than CTC.
Our salary calculator breaks down CTC into all components and calculates your exact take-home salary after statutory deductions.
CTC Components Breakdown
| Component | Typical % | Taxable? | Notes |
|---|---|---|---|
| Basic Salary | 40-50% | Yes | Base for PF, gratuity, HRA |
| HRA | 40-50% of Basic | Partly exempt | Tax benefit if paying rent |
| Special Allowance | Variable | Yes | Flexible component |
| LTA | Variable | Exempt on travel | Actual travel exemption |
| Employer PF | 12% of Basic | No (up to limit) | Employer's contribution |
| Gratuity | 4.81% of Basic | No | Payable after 5 years |
| Insurance | ₹10K-50K | No | Group health/term cover |
CTC to In-Hand Calculation Example
Employee with ₹12 LPA CTC
| CTC Components | |
| Basic Salary | ₹5,00,000 |
| HRA | ₹2,50,000 |
| Special Allowance | ₹2,40,000 |
| Employer PF (12%) | ₹60,000 |
| Gratuity (4.81%) | ₹24,000 |
| Insurance | ₹26,000 |
| Total CTC | ₹12,00,000 |
| Monthly Deductions | |
| Employee PF (12%) | ₹5,000 |
| Professional Tax | ₹200 |
| TDS (estimated) | ₹6,000 |
| Monthly In-Hand | |
| Gross Monthly | ₹82,500 |
| Deductions | ₹11,200 |
| Net In-Hand | ₹71,300 |
Understanding Provident Fund (PF)
PF is a retirement savings scheme where both employee and employer contribute:
- Employee contribution: 12% of Basic (deducted from salary)
- Employer contribution: 12% of Basic (part of CTC, not deducted)
- PF pension (EPS): ₹1,250/month of employer's share goes to pension
PF is mandatory if Basic ≤ ₹15,000/month. Higher basic = higher PF contribution. Interest rate is 8.25% (FY 2023-24), tax-free up to ₹2.5L contribution/year.
Gratuity Calculation
Gratuity is payable to employees who complete 5+ years of service:
Gratuity = (Last Basic × 15 × Years of Service) ÷ 26
Maximum tax-free gratuity: ₹20 lakhs. Companies may include gratuity in CTC as a deferred benefit, calculated as 4.81% of Basic per year.
Professional Tax by State
| State | Monthly PT | Annual Max |
|---|---|---|
| Maharashtra | ₹200 | ₹2,400 |
| Karnataka | ₹200 | ₹2,400 |
| West Bengal | Up to ₹200 | ₹2,500 |
| Tamil Nadu | ₹150-200 | Varies by income |
| Gujarat | ₹200 | ₹2,400 |
| Delhi | ₹0 | No PT |
| Rajasthan | ₹0 | No PT |
| UP | ₹0 | No PT |
Salary Negotiation Tips
- Focus on in-hand, not CTC - Ask for monthly take-home amount
- Review salary structure - Higher HRA = more tax exemption if paying rent
- Check variable pay - Is performance bonus guaranteed or discretionary?
- Verify insurance benefits - Family coverage, sum insured, OPD cover
- Understand ESOP vesting - Cliff period, vesting schedule, strike price
Salary Optimization Strategies
Tax-Efficient Salary Structure
- Maximize HRA - If paying high rent, higher HRA reduces taxable income
- Claim LTA - Tax-free leave travel allowance (2 times in 4-year block)
- Food Coupons - Up to ₹50/meal is tax-free
- NPS Contribution - Employer contributes 10% of Basic to NPS (tax-free)
- Reimbursements - Telephone, books, fuel against bills
Retirement Benefits Trade-off
Lower Basic = Lower tax but also lower PF and gratuity. If you're young with long career ahead, higher Basic builds larger retirement corpus. If near retirement, optimize for current cash flow.
New Tax Regime Impact on Salary
Under new tax regime (default from FY 2023-24):
- Standard deduction: ₹75,000 (increased from ₹50,000)
- Lower tax rates but NO exemptions for HRA, LTA, 80C, etc.
- Employer NPS contribution (up to 14%) still tax-free
Use our Income Tax Calculator to compare old vs new regime based on your salary structure.
Frequently Asked Questions
Is employer's PF contribution part of my salary?
Employer's PF is part of CTC but not part of your gross salary. It goes directly to your PF account. You don't see it in monthly salary but it's your money (accessible after retirement or resignation).
Can I opt out of PF?
PF is mandatory if Basic salary is ≤₹15,000/month. For higher basics, you can opt out with employer consent, but this is rare. Most employees prefer PF for guaranteed returns and tax benefits.
What is Gross vs Net salary?
Gross salary = Total earnings before deductions (Basic + Allowances).Net salary = In-hand amount after deducting PF, PT, TDS, and other deductions. Net is what you receive in bank.
How do I calculate take-home from CTC?
Quick estimate: In-hand ≈ 65-75% of CTC (varies by structure). For accurate calculation: CTC - Employer PF - Gratuity - Insurance = Gross. Then deduct Employee PF, PT, TDS to get Net.