CTC vs in-hand salary — why they are so different
Your CTC (Cost to Company) is the total your employer spends on you in a year. Your in-hand salary is what actually reaches your bank account after PF, gratuity, professional tax and income tax are taken out. The gap surprises most people — this calculator shows exactly where every rupee of your CTC goes.
How your take-home is calculated
Starting from your annual CTC, the calculator works through the standard components:
- Basic salary = a percentage of CTC (typically 40–50%).
- Employer PF = 12% of the PF base (your actual Basic, or capped at the ₹25,000/month wage ceiling, raised from ₹15,000 on 17 September 2026). This is part of CTC but not part of your gross salary.
- Gratuity = 4.81% of Basic, also carved out of CTC — see what it grows into with the gratuity calculator.
- Gross salary = CTC − employer PF − gratuity.
- Employee PF = another 12% of the PF base, deducted from your salary.
- Professional tax = a small state-specific amount (capped at ₹2,500/year).
- Income tax (TDS) = estimated from gross salary using the same engine as our income-tax calculator. In the old regime it also counts employee PF under 80C and paid professional tax.
In-hand = Gross − Employee PF − Professional tax − Income tax − any other deductions, then divided by 12 for the monthly figure.
A worked example
Take a ₹15,00,000 CTC with Basic at 50%, in Gujarat, under the new regime, with PF on the ₹25,000 ceiling. Employer and employee PF are ₹36,000 each, gratuity is ₹36,075, so gross salary is about ₹14,27,925. After employee PF, ₹2,400 professional tax and income tax, the monthly in-hand lands close to ₹1.09 lakh. Change the Basic %, state or PF basis above to see how each lever moves your take-home.
State-wise professional tax
Professional tax is levied by states, so it varies. Gujarat charges ₹200/month above ₹12,000 salary; Maharashtra, Karnataka, Telangana, Andhra Pradesh and West Bengal have their own slabs; and several states (Delhi, Haryana, Uttar Pradesh, Uttarakhand, Rajasthan) levy no professional tax at all. Pick your state above for the right figure. The total is always capped at ₹2,500 per year (Article 276 of the Constitution).
What this estimate does not include
Real salary structures vary by employer — dearness allowance (DA), special allowances, variable pay, reimbursements and exact PF rules differ. The old-regime estimate counts your employee PF under 80C and paid professional tax, but not other 80C contributions, HRA or personal deductions. Use the income-tax calculator to enter those. Treat this as a close, honest estimate to plan with — not your exact payslip.
Two PF rules are worth knowing. The ₹25,000 ceiling has applied since 17 September 2026, and the calculator uses it for the whole year, so for FY 2026-27 it shows your take-home from that date on. And since the labour codes took effect on 21 November 2025, if your allowances add up to more than half your total pay, the excess counts as wages for PF. If your employer has restructured your salary for this, set Basic % to match your payslip.