Salary Calculator

How Salary Calculator Works

What Is CTC?

CTC (Cost to Company) is the total amount a company budgets for an employee per year — it's the figure most offer letters headline, but it is not the amount that lands in your bank account. CTC can include components an employee never directly receives as cash: employer's PF contribution, gratuity provisioning, insurance premiums, and other benefits. This calculator does not invent or assume any of those hidden components — if the numbers you enter (Basic + HRA + Allowances) don't add up to your full CTC, it shows you that gap explicitly rather than silently guessing what it's made of.

CTC vs. Gross Salary

Gross Salary is what you actually earn before deductions — typically Basic + HRA + Allowances. It's usually smaller than CTC because CTC often includes employer-side contributions that never appear in your payslip as earnings. Gross Salary is what your monthly payslip's "Earnings" section adds up to.

Gross Salary vs. Take-home Salary

Take-home Salary (or "in-hand salary" or "net salary") is Gross Salary minus deductions — employee PF, professional tax, and anything else withheld before you're paid. This is the actual amount deposited into your account. The relationship, in order from largest to smallest, is: CTC ≥ Gross Salary ≥ Take-home Salary.

Basic Salary

Basic Salary is the fixed core component of your pay — typically 30-50% of CTC or Gross, depending on the company. It matters beyond just being a number: several other components (HRA, PF) are usually calculated as a percentage OF Basic, not of your total salary, so a lower Basic percentage can mean lower HRA and lower PF too, even if your total package stays the same.

HRA (House Rent Allowance)

HRA is a salary component meant to help cover rent, conventionally set as a percentage of Basic Salary — commonly 40-50% of Basic, with the higher end typically used for metro cities. This calculator uses that convention (HRA as a % of Basic), matching how most Indian payslips are structured.

Employee PF (Provident Fund)

The Employee Provident Fund is a retirement savings deduction, calculated as a percentage of Basic Salary (statutorily 12% in most cases, though this varies by scheme and company). This calculator lets you enter the PF percentage directly rather than hardcoding a statutory figure, since PF rules and applicable wage ceilings change and vary by employer and scheme.

Professional Tax

Professional tax is a small state-levied tax on salaried income, and the amount varies significantly by Indian state (and some states don't levy it at all). This calculator deliberately does not hardcode a state-specific slab — enter your actual monthly professional tax deduction from your payslip.

Salary Deductions — What This Tool Does and Doesn't Cover

This calculator handles Employee PF, Professional Tax, and any "Other Deductions" you enter as a flat monthly amount (loan EMIs, insurance premiums, etc.). It does not estimate income tax (TDS) — income tax depends on your tax regime, deductions/exemptions claimed, and statutory slabs that change every budget cycle. If you want to factor income tax into your take-home estimate, calculate it separately with the Income Tax Calculator and add it to "Other Deductions" here.

How Monthly Salary Is Calculated

Monthly Gross = Annual Gross ÷ 12
Monthly PF = Monthly Basic × PF%
Monthly Take-home = Monthly Gross − Employee PF − Professional Tax − Other Deductions

How Annual Salary Is Calculated

Annual Gross = Annual Basic + Annual HRA + Annual Allowances
Annual Take-home = Monthly Take-home × 12

Worked Example

CTC = ₹12,00,000/year, Basic = 40% of CTC, HRA = 50% of Basic, Other Allowances = ₹60,000/year, Employee PF = 12% of Basic, Professional Tax = ₹200/month:

Annual Basic = 12,00,000 × 40% = ₹4,80,000
Annual HRA = 4,80,000 × 50% = ₹2,40,000
Annual Gross = 4,80,000 + 2,40,000 + 60,000 = ₹7,80,000
Monthly Gross = 7,80,000 ÷ 12 = ₹65,000
Monthly PF = (4,80,000 ÷ 12) × 12% = ₹4,800
Monthly Take-home = 65,000 − 4,800 − 200 = ₹60,000
Annual Take-home = 60,000 × 12 = ₹7,20,000

Note the gap here: CTC was ₹12,00,000 but Gross was only ₹7,80,000 — the remaining ₹4,20,000 likely represents employer-side contributions (employer PF, gratuity provisioning, insurance, etc.) that this calculator doesn't model, since every company structures those differently.

Common Salary Calculation Mistakes

• Treating CTC as take-home pay. The gap between the two can be substantial — 10-25% of CTC is common, sometimes more.
• Calculating HRA as a percentage of CTC instead of Basic. HRA is conventionally a percentage of Basic Salary, not of the total package.
• Forgetting employer PF is separate from employee PF. Only the EMPLOYEE's PF contribution reduces your take-home pay; the employer's matching contribution is part of CTC but doesn't come out of your paycheck.
• Assuming professional tax is the same everywhere. It varies by state and by income slab within a state — check your own payslip rather than assuming a number.

Salary Negotiation Considerations

When comparing two offers, compare take-home pay, not headline CTC figures — two offers with identical CTC can produce very different in-hand amounts depending on how much of the CTC is Basic/HRA/Allowances versus employer-side components you never see in cash. Also ask specifically what's included in a quoted CTC (variable pay, joining bonus, ESOPs, and insurance premiums are sometimes bundled in) so you're comparing genuinely equivalent numbers.

CTC vs. In-hand Salary — the Bottom Line

As a rough rule of thumb, in-hand salary is often 70-85% of CTC for typical Indian salary structures, but this varies enormously by company, salary level, and how the CTC is structured — there's no universal percentage. Use this calculator with your own actual numbers rather than a rule of thumb whenever precision matters.

Related Tools

For income tax specifically, use the Income Tax Calculator — this tool intentionally does not duplicate that calculation. For other percentage math, see the Percentage Calculator or the Average Calculator, or work out savings with the Discount Calculator.