In-hand salary calculator

Cost to company is exactly what the words say: the total an employer expects to spend on employing you for a year. Some of that spending is salary paid to you. Some of it is money paid into accounts held in your name that you cannot touch this month. And some of it is a provision against a liability that only becomes yours if you stay long enough. All three are legitimately costs to the company. Only the first is pay.

This is not a trick, but it is routinely presented as a single impressive number precisely because the single number is the most flattering version of the offer. The defence is simple and it is always the same: ask for the component-wise breakup, and read it before you compare two offers. Two companies quoting ₹18,00,000 can differ by well over a lakh a year in what they actually pay into your account, without either of them misrepresenting anything.

The structure below is the one almost every Indian private-sector offer follows. The percentages vary; the shape does not.

Provident fund is the largest single reason your take-home is below your gross, and it is the part people most often misread as a loss. You contribute 12per cent of the PF wage base and your employer contributes the same. Your half comes out of your salary. The employer's half may or may not be inside your CTC. Both halves land in accounts in your name.

The rate deserves one clarification that almost every article gets wrong. Twelve per cent is a notified rate, not the statutory one. Section 16(1)(a) of the Code on Social Security 2020 sets the contribution at ten per cent of wages for employer and employee alike, and a proviso lets the Central Government substitute twelve per cent for establishments or classes of establishment it notifies. In practice twelve is what nearly everyone pays, which is why it is treated as the rate — but it is also why a minority of establishments legitimately contribute ten, and why your payslip is the authority on which applies to you.

What changed on 17 September 2026: the wage ceiling went from ₹15,000 to ₹25,000 a month. A gazette notification of that date raised it for the first time since September 2014. The Ministry of Labour & Employment's own wording is that the ceiling for monthly contributions becomes “₹25,000 per month or the actual salary/wages, whichever is lower”, and that the maximum contribution to the pension scheme is now 8.33 per cent of ₹25,000 instead of 8.33 per cent of ₹15,000.

If your employer restricts PF to the ceiling — which most do — this is a real change to your payslip. Your monthly PF deduction rises, your take-home falls slightly, and your PF balance grows faster. It also means that a salary calculator still computing on ₹15,000 will show you a take-home figure that is too high. At the time of writing, most of them do.

Employees' State Insurance applies only at or under ₹21,000 a month. Where it applies you pay 0.75 per cent of wages and your employer pays 3.25 per cent — four per cent in total, down from six and a half per cent with effect from 1 July 2019. Above the ceiling the line simply does not exist. The ceiling itself was last revised with effect from 1 January 2017, when it rose from ₹15,000 a month.

Professional tax is a State levy, and it is small.It is imposed under Article 276(1) of the Constitution by each State's own Act, with its own slabs — which is why no national slab table exists and why this page does not print one. What is uniform is the ceiling: Article 276(2), as amended by the Constitution (Sixtieth Amendment) Act, 1988, caps the total at ₹2,500 a year per person per State. So professional tax can never be the reason a salary is materially lower than you expected: at the cap it is about ₹208 a month, and ₹200 is the commonest monthly figure where it is charged at all. Some States do not charge it.

Because the slabs are State law and change with State budgets, the calculator above asks for the figure from your payslip rather than guessing it from a city. If you want to check the rule rather than the deduction, go to your State's own Act — the official consolidated texts are on India Code.

The default regime has lower rates across wider bands and a larger standard deduction of ₹75,000, and it withdraws almost everything else: the HRA exemption, LTA, and essentially all of Chapter VI-A. The old regime has higher rates, a smaller standard deduction of ₹50,000, and keeps the exemptions and deductions.

So the comparison reduces to a single question: are your exemptions and deductions together worth more than the rate difference? For most salaried people they are not, and three things explain why. First, below roughly ₹9 lakh of CTC the question is usually moot — the section 87A rebate of up to ₹60,000 takes the default-regime tax to nil, and you cannot do better than nil. Second, the rebate means a salaried individual pays no tax at all up to ₹12.75 lakh of salary under the default regime once the standard deduction is applied. Third, the old regime only wins if you actually claim the deductions — an intention to invest ₹1.5 lakh in 80C is worth nothing.

Two details worth knowing because they are where confident wrong answers live. The rebate is a cliff, not a taper: one rupee of taxable income over ₹12 lakh and the whole rebate would disappear — except that marginal relief caps the tax at the excess, so the cliff is softened rather than absolute. And the surcharge thresholds at ₹50 lakh, ₹1 crore and ₹2 crore have their own marginal relief, so crossing one by a small amount cannot cost you more than the amount by which you crossed it. The calculator above applies both reliefs; a good many do not.

Read the breakup, not the headline, and read it looking for five specific things. If the letter has no component-wise breakup, that is the first thing to ask for, in writing, before you respond to anything else.

Most salary negotiation energy goes into the CTC number, which is reasonable, because it is the number that compounds into every future offer. But two structural asks are worth real money and are much easier to win, because they often cost the employer nothing.

Ask for the employer's PF to sit outside CTC.On a ₹15,00,000 offer with PF on the wage ceiling, moving the employer's contribution out of CTC is worth ₹36,000 a year of additional gross — about ₹3,000 a month before tax — without the headline CTC changing at all. Many employers have a fixed policy here and will say no; it costs one sentence to ask.

Ask what Basic is, and whether it can be raised. If you intend to stay several years, a higher Basic builds a materially larger PF balance and a larger gratuity, at the cost of slightly lower monthly cash. If you need cash now, argue the other way. Either way, you are asking for a structure change rather than more money, which is a much easier conversation.

What is not worth negotiating: professional tax (capped at ₹2,500 a year by the Constitution), the PF rate (notified, not negotiable), and the allowance structure under the default regime (the exemptions it used to buy have been withdrawn, so splitting your pay into six named allowances achieves nothing).

Of all the lines inside a CTC that do not reach your account, the gratuity provision is the only one you can lose entirely. Provident fund money is yours from the month it is credited. A gratuity provision is an accounting entry against a liability that crystallises only when you complete five years of continuous service. Leave at four years and eleven months and the whole of it — counted in your CTC every year, and quoted to you in every appraisal letter — simply never arrives.

On a ₹15,00,000 CTC with Basic at 40 per cent, the provision is about ₹28,846 a year. Over four years and eleven months that is roughly ₹1,41,346 of CTC you were costed for and will not receive. It is not an abuse — the provision is a genuine accounting cost and the five-year rule is statutory — but it is worth knowing, because it makes your fifth anniversary one of the most financially consequential dates in your working life.

If you are anywhere near it, check the eligibility rules before you resign rather than after. The rounding rules are not intuitive, and a part-year over six months counts as a full year for the amount but does not get you over the five-year threshold.

Variable pay is quoted inside CTC at target, which means the CTC figure assumes a payout you have not earned yet and may not receive. It is conditional on company performance, on your own rating, and in many organisations on a distribution curve that guarantees most people land below target. Treating it as salary is the single largest source of disappointment in Indian offers.

The calculator above asks you to leave it out, deliberately. A take-home figure that includes a twelfth of an annual bonus is a number that will not match any month's bank credit — not the eleven months without the bonus, and not the one with it.

Before you accept an offer with a large variable component, ask one question: what percentage of target has actually been paid out for the last two or three cycles? An employer confident in its variable plan will answer. An employer that will not answer has given you the answer. If variable pay is more than about a quarter of the CTC and no payout history is forthcoming, discount it heavily when comparing offers.