CTC vs in-hand salary
CTC (Cost to Company) is the total amount your employer spends on you in a year — including items you never see in your bank account, such as the employer's PF contribution and gratuity. In-hand (take-home) salary is what actually reaches you after deductions like employee PF, professional tax and income tax.
How CTC becomes take-home pay
- Employer PF — 12% of Basic — is part of CTC but is not paid to you monthly.
- Gratuity provision — about 4.81% of Basic — is set aside for when you leave.
- The remainder is your gross salary (plus any bonus you receive).
- From gross, employee PF (12% of Basic), professional tax and income tax (TDS) are deducted.
Worked example
₹18 lakh CTC, New regime, Maharashtra
- Basic (50% of CTC)
- ₹9,00,000
- Employer PF
- ₹1,08,000
- Gratuity provision
- ₹43,269
- Gross salary
- ₹16,48,731
- Income tax + PF + professional tax
- ₹2,31,202
- Monthly in-hand
- ₹1,18,127
Why your payslip may differ
- Employers structure pay differently: Basic may be 40% or 50% of CTC, and allowances vary.
- PF may be capped at a ₹15,000 monthly wage, which raises your take-home.
- Variable pay and bonuses are usually paid at fixed times; this calculator spreads them across 12 months.
- Insurance premiums, NPS contributions and other deductions are not included unless you enter them.
Treat the result as a close estimate. Your employer's payslip is the final word.
Ways to increase your take-home
- Ask whether PF can be calculated on the statutory wage ceiling instead of the full Basic.
- Compare the New and Old regimes — the better one can add thousands to your yearly pay.
- Negotiate the fixed-versus-variable split, since variable pay is uncertain but taxed like salary.

