CTC to In-Hand Salary: How to Calculate Take-Home Pay

CTC ≠ In-Hand Salary

Every new joiner is surprised: the offer letter says ₹8 LPA but the bank credit is much less. That's because CTC (Cost to Company) includes everything the company spends on you — including parts that aren't paid directly to you.

Real example:

Salary component	Monthly amount
CTC (offer)	₹66,667
Employer PF	− ₹3,600
Gratuity	− ₹1,924
Take-home (gross)	≈ ₹61,143

And after income tax, the in-hand number drops further. Only a net pay calculator shows the real figure.

What Comes Out of Your Pay

Deduction	What it is	Who pays
Employee PF	12% of basic	You
Employer PF	12% of basic	Company (counts in CTC, not your salary)
Professional tax	₹200/month in most states (max ₹2,500/yr)	You
Income tax (TDS)	Based on old/new regime	You
Gratuity	~4.81% of basic each month	Company (counts in CTC)

Use the take-home salary calculator — enter your CTC, basic pay structure and regime, and it returns the exact in-hand amount.

Old vs New Tax Regime: Which Is Better for You?

• New regime (FY 2025-26): lower rates, but you give up most deductions (80C, HRA, standard deduction still applies in a reduced form)
• Old regime: higher rates, but deductions like HRA, 80C, 80D can substantially cut tax

If you claim a big HRA or invest in 80C, the old regime often wins. If your income is moderate and you claim little, the new regime is simpler and usually better.

Salary (per year)	Rebate/structure	Better choice
Up to ₹12,00,000	Rebate under new regime	New regime (often zero tax)
₹12–25,00,000	HRA + 80C claimed heavily	Old regime usually wins
Over ₹25,00,000	High rent/investments	Compare both in the tax calculator

How to Calculate Your In-Hand Salary (Step by Step)

1. Take the CTC and subtract employer PF + gratuity → gross salary
2. Subtract employee PF and professional tax → monthly taxable income
3. Apply the correct tax regime (the calculator does the slabs for you)
4. Subtract TDS → in-hand salary

Instead of doing slabs by hand, run all three numbers through the salary calculator and switch regimes to compare.

Why This Matters Before a Job Offer

• A higher CTC doesn't always mean higher take-home — check the basic pay and fixed vs variable split
• Variable pay (performance bonus) often isn't guaranteed — treat it as a bonus, not salary
• Know your in-hand before negotiating, so you don't accept an offer that's lower than your current take-home

FAQ

• Why is my in-hand salary lower than my CTC? CTC includes employer PF, gratuity, insurance and other benefits that you never receive as cash.
• Which tax regime should I choose? Run your compensation in both regimes. Up to ₹12 LPA the new regime usually wins; with heavy HRA/80C the old regime often wins.
• Is PF taken from both sides? Yes — 12% from you and 12% from the employer; the employer's share is part of your CTC, not your take-home.
• What is professional tax? A small state-level tax (usually ₹200/month), deducted from your salary in states like Karnataka, Maharashtra, Tamil Nadu, West Bengal and Telangana.