CTC to In-Hand Salary Calculator

Where your CTC actually goes

CTC means cost to company: everything the employer spends on you in a year. It is not your salary. Two things inside it never touch your bank account, and three more are deducted before the money is paid out.

1. The parts you never see

Employer PF contribution. 12% of your basic salary, paid by the employer into your EPF account. It is your money and it earns interest — currently around 8.25% — but you cannot spend it this month. It is genuinely a cost to the company, so it sits in CTC.

Gratuity. A provision of roughly 4.81% of basic, payable only if you complete five years of continuous service. Leave at four years and eleven months and you get none of it, yet it inflated your CTC every year you were there. Many employers include it; some do not.

2. The parts deducted from your payslip

Employee PF. Another 12% of basic, this time out of your salary, matched to the employer's share. Together that is 24% of basic going into retirement savings.

Professional tax. A state levy. In Andhra Pradesh: nothing below ₹15,000 monthly gross, ₹150 a month from ₹15,001 to ₹20,000, and ₹200 a month above that — ₹2,400 a year for most people. The Constitution caps it at ₹2,500 a year, which is why it has barely moved in decades.

TDS. Income tax, deducted monthly by your employer based on the regime you declare at the start of the year. Declare the wrong one and you either lose cash flow all year or face a shortfall at filing time.

The ₹15,000 PF wage ceiling — the nuance that changes your take-home

The statutory obligation under the EPF Act is 12% of ₹15,000 a month, which is ₹1,800. An employer has a genuine choice:

• Restrict to the ceiling. ₹1,800 a month each way regardless of your basic. Your take-home goes up; your retirement corpus goes down.
• Contribute on full basic. 12% of your actual basic, uncapped. Lower take-home, substantially larger corpus, and the whole employee share counts toward your 80C limit.

Both are legal and common. On a ₹12 lakh CTC with 40% basic, the difference is about ₹3,000 a month in your hand and roughly ₹36,000 a year in your PF. Your offer letter or payslip will tell you which applies — toggle the checkbox above to see both.

Why the basic percentage matters more than it looks

Basic salary is the base for PF, gratuity and your HRA exemption. A high basic means more forced savings and a lower monthly take-home. A low basic means more cash now, a smaller PF balance, and a smaller HRA exemption if you are on the old regime — because the exemption is capped at 40% of basic outside the metros, and 50% within them.

Guntur is not a metro, so the 40% limit applies here. Employers often set basic at 40% of CTC precisely to balance these effects.

Reading a salary offer properly

Before you accept, work out three numbers: gross salary (CTC minus employer PF and gratuity), monthly in-hand, and the value of the retirement contributions. A ₹12 lakh CTC with a high basic and full PF can put less in your account than an ₹11.5 lakh CTC with a capped one — while being the better package overall. Compare in-hand against in-hand, not headline against headline.

What this calculator does not model

• Variable pay, bonuses and performance incentives, which are often 10–20% of CTC and paid annually rather than monthly.
• LTA, food coupons, fuel reimbursement and telephone allowance — tax-free or partly tax-free under the old regime, taxable under the new.
• Employer NPS under 80CCD(2), deductible in both regimes up to 14% of basic. If your employer offers it, take it.
• ESI, which applies below ₹21,000 monthly gross and adds a 0.75% employee deduction.

If your structure includes any of these, the number above will be close but not exact. Send us your payslip on WhatsApp and we will give you the precise figure.