How to use the CTC to In-Hand Salary Calculator
- Enter your annual CTC and the basic salary as a percentage of CTC (from your salary breakup).
- Enter any variable pay or bonus included in the CTC.
- Choose whether PF is on the full basic or capped at ₹25,000 a month, and whether gratuity is part of CTC.
- Adjust professional tax for your state and add any other monthly deductions.
Formula
Gross fixed salary = CTC − Employer PF − Gratuity − Variable pay
Taxable income = Gross fixed salary + Variable pay − Standard deduction
Monthly in-hand = (Gross fixed − Employee PF − Professional tax − Income tax − Other deductions) ÷ 12
- Employer PF:
- 12% of basic (or of ₹25,000/month if capped)
- Gratuity:
- 4.81% of basic, if included in CTC
From CTC to in-hand, step by step
- Remove what the employer pays on your behalf. Employer PF and the gratuity provision are part of CTC but are not paid out monthly.
- Set aside variable pay. Performance bonuses are paid later and depend on targets, so they are excluded from monthly in-hand.
- Deduct your own PF. Normally 12% of basic, matched by the employer.
- Deduct professional tax. A state tax of up to ₹2,500 a year; some states don't levy it.
- Deduct income tax (TDS). Estimated on gross salary + variable pay − ₹75,000 standard deduction, spread evenly over 12 months.
PF on capped vs full basic
The statutory EPF wage ceiling is ₹25,000 a month, so the mandatory contribution is at most ₹3,000 a month each for employee and employer. Many employers contribute on the full basic instead. Contributing more raises your savings but lowers in-hand pay — check your payslip or ask HR which applies.
Tax assumptions
Note
| Taxable income | Rate |
|---|---|
| Up to ₹4 lakh | 0% |
| ₹4 lakh – ₹8 lakh | 5% |
| ₹8 lakh – ₹12 lakh | 10% |
| ₹12 lakh – ₹16 lakh | 15% |
| ₹16 lakh – ₹20 lakh | 20% |
| ₹20 lakh – ₹24 lakh | 25% |
| Above ₹24 lakh | 30% |
Worked examples
₹12 lakh CTC, basic 40%, PF on the ₹25,000 ceiling, gratuity in CTC, ₹200/month professional tax
- Basic = ₹4,80,000 a year (₹40,000 a month)
- Employer PF = 12% × 25,000 = ₹3,000 × 12 = ₹36,000; gratuity = 4.81% × 4,80,000 = ₹23,088
- Gross fixed = 12,00,000 − 36,000 − 23,088 = ₹11,40,912
- Taxable income = 11,40,912 − 75,000 = ₹10,65,912 → no tax (fully rebated up to ₹12 lakh)
- In-hand = 11,40,912 − 36,000 (PF) − 2,400 (PT) = ₹11,02,512 a year
About ₹91,876 a month
₹20 lakh CTC with the same structure
- Gross fixed = 20,00,000 − 36,000 − 38,480 = ₹19,25,520
- Taxable income = ₹18,50,520 → tax incl. cess ≈ ₹1,76,908
- In-hand = 19,25,520 − 36,000 − 2,400 − 1,76,908 = ₹17,10,212 a year
About ₹1,42,518 a month
Important notes
- This is an estimate. Your employer's payroll may treat allowances, reimbursements and tax declarations differently.
- Month-to-month TDS often varies because employers adjust it as the year progresses; the annual total is what matters.
Frequently asked questions
What is the in-hand salary for ₹12 lakh CTC?
About ₹91,900 a month with a typical structure (40% basic, PF on the ₹25,000 wage ceiling that applies from 17 September 2026, gratuity in CTC, ₹200 professional tax). If your employer still calculates PF on ₹15,000, it's about ₹94,300. Under the new regime, taxable salary of up to ₹12 lakh after the standard deduction attracts no tax because of the rebate.
How does the new ₹25,000 PF ceiling change my in-hand salary?
If your basic is above ₹15,000 and your PF was capped, both your PF and your employer's PF rise from ₹1,800 to up to ₹3,000 a month. Your PF savings go up and monthly in-hand salary goes down by up to ₹1,200 (more if the employer's extra share comes out of your CTC).
Why is my in-hand salary so much lower than CTC ÷ 12?
Because CTC includes employer PF, gratuity and variable pay that aren't paid monthly, and because your own PF, professional tax and TDS are deducted from what remains.
Does this calculator support the old tax regime?
Not yet. It uses the new regime, which is the default. If you've chosen the old regime and claim deductions such as 80C and HRA, your tax will differ.
Is variable pay included in the monthly in-hand figure?
No. It is included when estimating annual tax, but shown separately because it is usually paid annually or quarterly and depends on performance.
Sources and review
Last reviewed on by the BizToolsIndia editorial team. Official references:
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