Your in-hand salary is your CTC minus everything the employer counts as a cost but never pays into your bank account each month: employer PF, gratuity provision, and sometimes insurance or variable pay, followed by deductions from your own gross salary — employee PF, professional tax and income tax. For most salaried Indians under the new regime, take-home ends up somewhere between 75% and 93% of CTC. The exact share depends on your salary level, how much variable pay is baked in, and whether PF is calculated on your full basic or capped at the statutory wage ceiling.
What CTC actually includes
Cost to Company is the total amount an employer spends on you in a year. It is a budgeting number for the company, not a promise of cash. A typical Indian CTC is built from three layers:
- Fixed monthly pay — basic salary, HRA, special allowance, and sometimes LTA or meal benefits.
- Retirals and statutory costs — employer PF contribution (12% of basic, or 12% of ₹15,000 if your employer caps it), gratuity provision (about 4.81% of basic), and employer NPS if offered.
- Variable and one-time items — performance bonus, joining bonus, retention bonus, ESOPs, and the cost of group health or term insurance.
Only the first layer reaches your account every month. Retirals go into your PF account or build up as a future liability, and variable pay arrives only if targets are met — often once a year.
From CTC to gross salary to in-hand
The conversion happens in two steps.
Step 1 — CTC to gross salary: subtract employer PF, gratuity, employer NPS, insurance premiums and any variable pay you are not certain to receive. What remains is your gross salary.
Step 2 — gross salary to in-hand: subtract employee PF (another 12% of basic, matching the employer), professional tax (up to ₹2,500 a year in states that levy it, commonly ₹200 a month), and income tax deducted as TDS. The result is your annual take-home; divide by 12 for the monthly figure.
Worked example: ₹15 lakh CTC
Assume basic is 40% of CTC, PF is calculated on the ₹15,000 wage ceiling, no variable pay, and the new tax regime. These are the same assumptions our CTC to In-Hand calculator uses by default.
- Basic salary: ₹6,00,000 a year
- Employer PF: ₹21,600 (12% of ₹15,000 × 12)
- Gratuity provision: about ₹28,860 (4.81% of basic)
- Gross salary: about ₹14,49,540
- Employee PF: ₹21,600
- Professional tax: ₹2,400
- Income tax (new regime, after ₹75,000 standard deduction, plus 4% cess): about ₹89,600
Take-home works out to about ₹13.36 lakh a year, or roughly ₹1,11,300 a month — around 89% of CTC. See the full component split on the 15 LPA in-hand salary page.
How the same CTC can pay far less
Change two assumptions and the picture shifts. If your employer computes PF on the full basic of ₹6 lakh instead of the capped wage, employer and employee PF each become ₹72,000 a year — together over ₹1 lakh more leaving your monthly pay than in the capped case. Add a 15% variable component (₹2.25 lakh) that is paid only at year-end, and your fixed monthly take-home can drop towards 75–78% of headline CTC. This is why two offers with the same CTC can differ by ₹10,000 or more per month in-hand.
Why the percentage falls as salary rises
Under the new regime, a salaried person with gross pay up to about ₹12.75 lakh pays no income tax thanks to the ₹75,000 standard deduction and the Section 87A rebate up to ₹12 lakh of taxable income. Above that, slabs climb from 15% up to 30%. So at lower CTCs the gap between CTC and in-hand is mostly PF and gratuity, while at higher CTCs income tax becomes the biggest deduction. Using the same default assumptions:
- 10 LPA — tax is nil, take-home is about 93% of CTC
- 20 LPA — take-home is about 87% of CTC
- 30 LPA — take-home is about 81% of CTC
The in-hand salary table lists every common CTC from 3 LPA to 100 LPA so you can compare at a glance.
Questions to ask before you accept an offer
- How much of the CTC is variable, and what was the actual payout percentage last year?
- Is PF calculated on full basic or on the ₹15,000 ceiling? Full-basic PF lowers take-home but grows your retirement savings.
- Are joining or retention bonuses included in the CTC figure? They do not recur in year two.
- Does the CTC include group insurance premiums or ESOP value?
- Is employer NPS offered? Under Section 80CCD(2), employer NPS up to 14% of basic is deductible even in the new regime, which can cut your tax.
Asking these turns a headline number into a monthly number you can actually budget with.
Can you increase in-hand without a raise?
Sometimes. Restructuring is limited in the new regime, but employer NPS contributions are still deductible, and a lower PF base (if your employer allows it) increases cash in hand at the cost of retirement savings. In the old regime, HRA, LTA and other allowances can reduce taxable income if you actually incur the expenses. Our salary structure optimiser shows how these choices move your monthly take-home.
To see your own number, enter your CTC and regime in the CTC to In-Hand Salary calculator — it splits out basic, HRA, PF, gratuity, professional tax and income tax line by line.