In-hand Salary Calculator

Estimate your monthly take-home pay under the New Tax Regime (FY 2025-26).

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In-hand Salary / CTC Calculator: turn your offer letter into real take-home pay

When a recruiter quotes a package of Rs. 12 lakh, that figure is your CTC (Cost to Company), the total annual amount your employer spends on you, not the money that lands in your bank account. This calculator bridges that gap. It breaks a CTC down into its parts, such as basic salary, HRA, employer contributions and allowances, and then subtracts the mandatory deductions to show your monthly in-hand (take-home) salary. It is built for job seekers comparing offers, freshers reading their first CTC, and anyone negotiating a raise who wants to know what actually changes in hand.

What CTC actually contains

CTC is layered. Some of it you receive as cash each month (gross salary), some of it your employer pays on your behalf and you never see monthly (like employer PF and gratuity), and some is deducted before payout (employee PF, professional tax, TDS). This calculator separates these three buckets so the shrinkage from CTC to in-hand stops being a mystery.

Basic salary: the foundation, usually 40 to 50 percent of CTC. Most other components are calculated from it.
HRA (House Rent Allowance): commonly 40 to 50 percent of basic, partly tax-exempt if you pay rent.
Employer PF: 12 percent of basic (or of Rs. 15,000 where the statutory wage ceiling is applied). It sits inside CTC but is not cash-in-hand.
Gratuity provision: about 4.81 percent of basic, set aside by the employer. You actually receive it only after 5 years of continuous service.
Special / other allowances: the balancing figure that makes the components add up to CTC.

The formula in words

Gross salary = CTC minus employer PF minus gratuity provision (and minus any other employer-only costs like insurance premiums). Then In-hand salary = Gross salary minus employee PF minus professional tax minus TDS (income tax). Your monthly take-home is simply the annual in-hand divided by twelve.

A fully worked example (annual figures)

Assume a CTC of Rs. 12,00,000 with basic at 40 percent of CTC and HRA at 50 percent of basic.

Basic = 40% of 12,00,000 = Rs. 4,80,000
HRA = 50% of basic = Rs. 2,40,000
Employer PF = 12% of basic = Rs. 57,600
Gratuity provision = 4.81% of basic = Rs. 23,088
Special allowance (balancing) = 12,00,000 minus 4,80,000 minus 2,40,000 minus 57,600 minus 23,088 = Rs. 3,99,312

Now build gross and in-hand:

Gross salary = CTC minus employer PF minus gratuity = 12,00,000 minus 57,600 minus 23,088 = Rs. 11,19,312
Less employee PF (12% of basic) = Rs. 57,600
Less professional tax (varies by state, capped at Rs. 2,500 per year; here Rs. 2,400) = Rs. 2,400
Less TDS: under the new tax regime for FY 2025-26, taxable salary after the Rs. 75,000 standard deduction is about Rs. 10,44,000, which is within the Rs. 12 lakh rebate ceiling, so TDS here is nil.

In-hand (annual) = 11,19,312 minus 57,600 minus 2,400 = Rs. 10,59,312, or roughly Rs. 88,276 per month. Notice how a 12 lakh package delivers around 10.6 lakh in hand even before any income tax applies.

Tax treatment you should know

Employee PF qualifies for deduction under Section 80C in the old regime. The HRA exemption (old regime) is the least of three amounts: actual HRA received; rent paid minus 10 percent of basic; and 50 percent of basic in metro cities (40 percent in non-metro). Gratuity received on exit is tax-exempt up to Rs. 20 lakh for private-sector employees covered by the Payment of Gratuity Act. The new regime for FY 2025-26 offers a Rs. 75,000 standard deduction and a Section 87A rebate that makes taxable income up to Rs. 12 lakh effectively tax-free, meaning a salaried person can earn up to about Rs. 12.75 lakh with no tax, but it disallows most exemptions like HRA and 80C. Always compare both regimes with your actual rent and investments before deciding.

Eligibility and edge cases

PF wage ceiling: where the Rs. 15,000 statutory ceiling is applied, PF is 12% of Rs. 15,000 (Rs. 1,800 per month), not 12% of your full basic, which raises in-hand.
Gratuity: the 4.81% provision is normally paid out only after 5 years; leaving earlier means you forfeit it, though it still reduced your CTC.
Professional tax does not exist in every state (for example, it is not levied in Delhi or Haryana).
Variable pay or bonus is often part of CTC but paid quarterly or annually, so month-to-month in-hand can be lower than a simple twelfth of CTC.

Common mistakes and tips

Do not treat CTC as salary; employer PF and gratuity inflate the number without reaching your account monthly.
Check whether the offer counts variable pay at 100 percent, since you usually earn it only on meeting targets.
Confirm the actual basic percentage, because a lower basic means less PF and a smaller HRA exemption but slightly higher immediate cash.
Ask whether gratuity and insurance are shown inside CTC; two offers with the same CTC can differ in real take-home.
Run the numbers under both tax regimes for your situation before signing.

Frequently asked questions

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

CTC is the total annual cost your employer bears, including employer PF, gratuity provision and benefits you never receive as monthly cash. In-hand salary is what actually reaches your bank account after subtracting employee PF, professional tax and TDS from your gross salary.

How is basic salary usually decided in a CTC?

Basic salary is typically set at 40 to 50 percent of CTC. It matters because PF, gratuity and the HRA exemption are all calculated as a percentage of basic, so a higher basic increases retirement savings but slightly lowers immediate take-home.

Why is employer PF part of my CTC if I never see it?

Employers include their 12 percent PF contribution in CTC because it is a real cost to them. It goes into your EPF account for retirement rather than your monthly salary, which is why CTC always looks larger than gross or in-hand pay.

When do I actually receive the gratuity amount shown in my CTC?

Gratuity is payable only after you complete 5 years of continuous service with the same employer. The roughly 4.81 percent provision reduces your CTC every year, but you forfeit it if you leave before completing five years.

Is professional tax charged in every Indian state?

No. Professional tax is a state levy, so states like Delhi and Haryana do not charge it, while states like Maharashtra and Karnataka do. Where applicable, it is capped at Rs. 2,500 per year.

Will I pay TDS on a 12 lakh CTC under the new regime?

Under the new tax regime for FY 2025-26, a Section 87A rebate makes taxable income up to Rs. 12 lakh effectively tax-free, and salaried people also get a Rs. 75,000 standard deduction (so salary up to about Rs. 12.75 lakh can attract no tax). On a 12 lakh CTC the taxable income usually stays below the ceiling and TDS can be nil, though tax applies at higher salaries.