Salary / CTC Calculator

How a Salary / CTC Calculator Works

The number in your offer letter is almost never the number that lands in your bank account. That headline figure is your CTC — cost to company — the total your employer spends on you in a year, including several things you never receive as spendable cash. A salary calculator untangles that CTC into its parts so you can see what actually reaches you each month, and why the gap exists.

The three numbers: CTC, gross, and take-home

There are really three salary figures, and confusing them is the most common reason an offer feels smaller than expected. CTC is the whole package. Gross salary is CTC minus the parts the employer pays into funds rather than to you — chiefly the employer's provident fund contribution. Take-home (net) is gross minus your own deductions: your provident fund contribution and, in the real world, income tax. This calculator walks the structural path from CTC down to a pre-tax take-home figure.

The building blocks: Basic, HRA, and special allowance

Salary structures are built around Basic salary, usually set as a percentage of CTC — commonly 40% to 50%. Basic matters because so much else is derived from it. HRA (House Rent Allowance) is typically a percentage of Basic, often 40% or 50%, and carries tax benefits if you pay rent. Whatever cash remains after Basic, HRA, and the statutory contributions is bundled into a special allowance, the flexible, fully taxable residual that makes the gross add up. Raising the Basic percentage shifts money into Basic and PF and shrinks the special allowance; lowering it does the reverse.

Provident Fund: the retirement slice

The Employees' Provident Fund (PF) is a mandatory retirement contribution of 12% of Basic, paid by both you and your employer. Your 12% is deducted from your salary, which is why it reduces take-home; the employer's matching 12% goes straight into your PF account. There is a wrinkle worth knowing: the statutory scheme only requires PF on Basic up to a ₹15,000-a-month wage ceiling, which caps the mandatory contribution at ₹1,800. Some employers stick to that cap; others contribute 12% of your full Basic, which is more generous but lowers your immediate take-home. The PF basis toggle on this calculator lets you see both versions, because which one applies depends entirely on your employer's policy.

Is employer PF inside or outside CTC?

Employers handle the employer PF contribution two ways. Most fold it into the CTC figure, which is why a headline CTC always overstates spendable salary — a chunk of it is retirement money you cannot touch until much later. Some present employer PF as a benefit over and above CTC. The employer PF toggle models both: when it is inside CTC, gross is CTC minus the annual employer PF; when it is separate, the whole CTC is gross and the employer PF sits on top. Either way, employer PF never appears in your monthly bank credit.

What this calculator deliberately does not do

This is important, and we would rather be upfront than misleading. This tool shows a structural CTC breakdown only. It does not calculate income tax (old vs new regime), professional tax (which varies by state), or TDS. The take-home it shows is therefore a pre-tax figure — your real in-hand pay will be lower once tax is deducted. We have scoped tax out on purpose: India's two tax regimes, the deductions that differ between them, state-wise professional tax, and the way TDS is spread across the year are involved enough to deserve their own dedicated tool rather than a rough bolt-on that could mislead. A full take-home estimate including tax will come from a separate Income Tax Calculator (coming soon); until then, use this page to understand the structure of your package, not your final tax liability.

How to read your offer letter

Armed with the breakdown, you can sanity-check an offer. Look first at how much of CTC is Basic — a very low Basic can mean a smaller PF and gratuity base, which affects long-term benefits even if it nudges monthly cash up. Check whether employer PF, gratuity, or insurance premiums are baked into the CTC, since those inflate the headline without adding to what you can spend. Compare two offers on gross and pre-tax take-home, not on CTC alone, because two identical CTCs can produce quite different in-hand pay depending on structure. Then, once you know your regime and deductions, apply tax separately to land on the true monthly figure.

A note on how structures vary

No two salary slips look exactly alike. Employers use different component names — special allowance, flexi benefits, LTA, conveyance — and different rules for what counts toward Basic. Some add meal cards, NPS contributions, or variable pay that only lands quarterly or annually. The percentages here are sensible, common defaults, but treat the output as a well-structured approximation of your package rather than a replica of a specific employer's payroll. When in doubt, match the toggles and percentages to the figures printed on your own offer letter or pay slip.