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Enter total CTC — not just base salary

What Is CTC and Why Is Your In-Hand Salary Much Lower?

This is probably the most confusing thing about getting your first job offer. Your offer letter says ₹8 LPA (lakhs per annum), but when your first salary comes in, it's nowhere close to ₹66,666 per month. Where did the rest go?

CTC stands for Cost to Company — it's the total amount your employer spends on you annually. This includes your actual salary AND costs the employer bears: their share of Provident Fund (12% of basic), gratuity contributions, sometimes group health insurance. These never appear in your bank account.

Then, from what remains (your gross salary), your employer deducts: Employee's PF (12% of basic), Professional Tax (state-specific, typically ₹200/month), and Income Tax (TDS based on your tax regime).

Quick Rule of Thumb: For a typical salaried employee in India, in-hand salary is roughly 70–80% of CTC for packages under ₹10L, and can drop to 65–70% for higher packages due to tax.

Real Example: ₹8 LPA Salary Breakdown

Annual CTC: ₹8,00,000
Less: Gratuity (4.81%) = ₹38,480
Less: Employer PF = ₹15,360
Annual Gross = ₹7,46,160 → Monthly Gross: ₹62,180

Deductions: Employee PF ₹1,487 + Prof Tax ₹200 + TDS ₹0 (under ₹12L limit, new regime)
In-Hand: ~₹60,493/month

Common Questions About Salary Calculation

No — gross salary is your total monthly earnings before deductions. In-hand (or take-home) is what you actually receive after PF, professional tax, and income tax are subtracted. Gross is usually higher than take-home by 15–25%.
PF is 12% of your basic salary. Since basic is typically 40–50% of your CTC, the actual PF deduction comes to around 4.8–6% of your total CTC — and that's only the employee's share. Your employer contributes another 12% of basic (which is why they include "employer PF" in your CTC). The silver lining: it's your money, earning 8.25% interest annually.
Now that you know your actual take-home, you can negotiate smarter. If your employer offers flexibility, ask for more HRA (it's partially tax-exempt) or meal allowances, which reduce your taxable income. Always ask "what's the fixed gross" rather than just CTC — the gross is what your take-home is calculated from.
Yes, approximately. Under the new tax regime with standard assumptions (40% basic, metro HRA, 12% PF), a ₹10 LPA CTC typically gives you ₹69,000–₹73,000 monthly in-hand. Exact figures depend on your employer's salary structure and state. Use our calculator above for a personalised breakdown.