What is the difference between CTC and in-hand salary?

CTC is everything the employer spends on you in a year, including its PF contribution, gratuity, insurance and variable pay. In-hand salary is what reaches your bank account each month after employee PF, professional tax and income tax (TDS) are deducted, so it is always lower than CTC divided by twelve.

Which tax regime should I choose?

The new regime has lower slab rates and a larger rebate but allows very few deductions. The old regime can work out cheaper if you pay high rent and claim HRA, invest the full 80C limit and pay health insurance premiums. Enter your real rent and investments here and compare the two tax figures side by side.

Why is variable pay not included in my monthly in-hand?

Variable pay or a performance bonus is usually paid once or twice a year and depends on ratings or company results, so it is not part of your fixed monthly salary. This calculator shows it separately, after the extra tax it attracts, so you do not plan monthly expenses around money that may change.

Is gratuity paid to me every month?

No. Gratuity is shown in many CTC letters but is paid only when you leave after completing the qualifying years of service, usually five. That is why this calculator subtracts it from CTC and never adds it to your monthly in-hand salary. If your offer letter does not include gratuity in CTC, untick that option.

CTC to In-Hand Salary Calculator

Free CTC to In-Hand Salary Calculator

Split your CTC into basic, HRA, PF and tax to see your monthly take-home pay under the new and old tax regimes, side by side — free. Under the current new-regime rules, the section 87A rebate makes tax nil up to ₹12 lakh of taxable income, and marginal relief limits tax just above that to the excess income.

How CTC turns into in-hand salary

An offer letter lists cost to company, not take-home pay. This calculator follows the usual order an Indian payroll team uses:

Variable pay is set aside, and basic salary is worked out as a percentage of the fixed part. Most companies use 40% to 50%.
HRA is a percentage of basic. Employer PF, gratuity and employer NPS come out of CTC but never reach your account each month.
Whatever is left becomes special allowance. Basic, HRA and special allowance together make your gross fixed salary.
Employee PF (12% of the PF wage), professional tax and income tax are deducted from gross salary to give your monthly in-hand.

New regime or old regime?

The new regime is the default and suits most people with few investments: lower slab rates, a higher standard deduction and a rebate that brings tax to zero up to a set income. The old regime allows HRA exemption, 80C and 80D, so it can win when rent and investments are high. Salaried employees can usually pick a regime each year when declaring investments to the employer, so re-check when your salary or rent changes.

Ask HR for the salary structure annexure; it shows your real basic and HRA percentages.
Check whether PF is on full basic or on the statutory wage ceiling — it changes both in-hand pay and retirement savings.
Keep rent receipts and investment proofs ready; the employer needs them before it reduces TDS under the old regime.

Comparing a raise? Try the salary hike calculator, put two offers side by side with the job offer comparison calculator, prepare your ask with a salary negotiation script, and plan your joining date with the notice period calculator.

Worked example

A ₹15 lakh CTC in Mumbai

What goes in

CTC: ₹15,00,000, no variable pay Defaults: basic 50%, HRA 50% of basic, PF on full basic, gratuity in CTC, professional tax ₹2,500 Old regime: rent ₹25,000 a month, other 80C ₹50,000

What you get

Basic is ₹7,50,000 and HRA ₹3,75,000; employer PF of ₹90,000 and gratuity of ₹36,075 come out of the CTC, leaving special allowance of ₹2,48,925 and fixed cash pay of ₹13,73,925. Under the new regime, after the ₹75,000 standard deduction, taxable income is ₹12,98,925, just above the rebate limit, so tax with cess is ₹77,832 and monthly in-hand is about ₹1,00,299. The old regime allows ₹2,25,000 HRA exemption and ₹1,40,000 under 80C, yet tax is ₹1,07,936 and in-hand about ₹97,791, so the new regime saves about ₹30,104 a year.

Common mistakes

Dividing CTC by twelve and expecting that amount monthly, when employer PF, gratuity and variable pay are part of CTC but never paid in each salary.

Leaving PF on full basic when the employer caps the PF wage at ₹15,000 a month, which understates in-hand pay for higher salaries.

Assuming the old regime is cheaper because you pay rent, without entering the rent and investments; with typical deductions the new regime often still wins.

Treating the variable pay figure as guaranteed monthly income, when it is usually paid yearly or quarterly and depends on performance.

When to use it: Use this calculator to see real monthly take-home pay from one CTC; to compare two offers including commute and joining costs, use the offer comparison calculator.