Your CTC (Cost to Company) is not the amount that lands in your bank account. It includes items like the employer’s PF contribution and gratuity provision, money the company sets aside on your behalf but that never shows up on your monthly payslip. Enter your annual CTC below to see a realistic month-by-month breakdown of what you’ll actually take home, along with every deduction along the way.

How the calculation works

This calculator builds your salary structure the way most Indian employers actually design one, then works out deductions in order:

1. CTC is split into Basic Pay (a percentage of CTC you can adjust in Advanced options), HRA (50% of Basic), Employer PF, an optional Gratuity provision, any Bonus or Variable Pay, and a balancing Special Allowance.
2. Gross Salary is what’s actually paid out before deductions: CTC minus the Employer PF and Gratuity, since those two amounts never reach your payslip.
3. Deductions are subtracted from Gross: your own PF contribution (mirrors the employer’s), Professional Tax if your state levies one, ESI if your gross falls at or below the Rs 21,000/month statutory ceiling, and income tax (TDS).
4. Net In-Hand Salary is what’s left, shown both as a monthly and annual figure.

Income tax is calculated under the New Tax Regime, the default regime since FY 2023-24, using FY 2026-27 slabs: no tax up to Rs 4 lakh, then 5% / 10% / 15% / 20% / 25% / 30% in Rs 4 lakh bands up to Rs 24 lakh and above. A Rs 75,000 standard deduction applies, and the Section 87A rebate brings tax down to zero for taxable income up to Rs 12 lakh. This tool doesn’t calculate old-regime tax (HRA and 80C exemptions), since almost everyone defaults to the new regime now unless they opt out.

What actually makes up your CTC

• Basic Pay: usually 40-50% of CTC, the base on which PF and gratuity are calculated.
• HRA: House Rent Allowance, conventionally 50% of Basic.
• Special Allowance: the balancing component that makes the rest of your CTC add up.
• Employer PF Contribution: 12% of Basic (or of Rs 15,000 if your employer applies the statutory wage ceiling), paid into your EPF account, not your bank account.
• Gratuity Provision: many employers set aside 4.81% of Basic toward gratuity as part of your CTC, even though you only receive it after 5 years of service.
• Bonus / Variable Pay: often included within CTC rather than paid on top of it, worth checking your offer letter for.

Frequently asked questions

Why is my in-hand salary so much lower than my CTC?

Because CTC includes money that never reaches your bank account: the employer’s PF contribution and gratuity provision both count toward CTC but are held back, one in your EPF account and the other until you complete 5 years of service. Add your own PF deduction, professional tax, and income tax on top, and in-hand salary commonly works out to 70-85% of CTC depending on your income level.

Does this calculator account for the old tax regime?

No. It calculates tax under the New Tax Regime only, since that’s the default regime for most taxpayers since FY 2023-24. If your employer still lets you opt into the old regime and you have significant HRA or 80C deductions to claim, your actual in-hand salary under the old regime could differ from this estimate.

Why does the Basic Pay percentage matter?

Basic Pay is the base on which your PF contribution and gratuity are calculated, so a higher Basic percentage generally means a higher PF deduction (lower monthly in-hand) but a larger retirement corpus. Most companies fix this between 40-50% of CTC; check your salary structure or offer letter for the exact figure your employer uses.

Is Professional Tax the same across India?

No, it’s a state-level tax with its own slabs. States like Delhi, Haryana, Uttar Pradesh, and Rajasthan don’t levy it at all, while others like Karnataka, Maharashtra, West Bengal, and Tamil Nadu cap it at Rs 2,500 a year for higher earners. This calculator uses an approximate figure for your selected state; your actual deduction may vary slightly.

When does ESI apply instead of income tax deductions changing?

ESI (Employee State Insurance) is a separate 0.75% employee contribution that applies automatically when your gross monthly salary is Rs 21,000 or below. It doesn’t replace PF or income tax, it’s an additional deduction that funds medical benefits, and it phases out once your salary crosses that ceiling.

Can I include my bonus in this calculation?

Yes, enter it under Advanced options as Annual Bonus / Variable Pay. This calculator assumes your bonus is already included within your stated CTC, which is how most Indian offer letters structure it, rather than being paid on top of CTC.

What if my employer doesn’t include gratuity in my CTC breakup?

Uncheck “Include gratuity in CTC” under Advanced options. Not every employer structures gratuity as a CTC component; some absorb it separately as a statutory cost outside your stated CTC figure.

Is this calculator accurate enough to plan my finances around?

It’s a close estimate built on standard Indian payroll structuring and current tax slabs, useful for comparing job offers or sanity-checking a payslip. But your employer’s exact Basic percentage, allowance structure, and any additional deductions (loan EMIs, insurance premiums) will shift the real number, so treat this as a strong starting estimate rather than a substitute for your actual payslip.

Looking for payroll software that handles all of this automatically, including PF, ESI, professional tax, and TDS filing? Compare options on our payroll software page.