How To Calculate In-Hand Salary From CTC

CTC is the number on your offer letter. In-hand salary is the number your bank sends you a message about. They are never equal, and the gap is bigger than most people expect: on the example in this guide it is ₹15,926 every single month.

We will follow one salary, 15 LPA, from the offer letter to the bank, so every figure on the page belongs to the same sum. You can swap in other salaries, and at the end you can try your own.

The Formula In One Picture

Five subtractions take a CTC down to the money in your bank. Here they are in order, with a 15 LPA salary falling through them.

The brackets hold the pay you are actually given across the year. Dividing by 12 turns it into the top line of your payslip. The last three terms are the deductions on that payslip, and whatever remains is what the bank receives.

Variable pay sits in the brackets because it is paid once a year, not every month. Many offers have none. If yours does, take it out first and treat it separately.

What Is Inside Your CTC

CTC means cost to company: everything your employer spends on you in a year. Only part of that is paid to you every month.

Open your offer letter and find the table of components. They fall into up to three groups. The picture shows two, because this example has no variable pay.

• Paid every month. Basic salary, HRA and special allowance. This is the salary on your payslip.
• Set aside for you. Your employer’s PF contribution and gratuity. They count towards your CTC, but they go into your PF account or are paid when you leave. They never arrive in your bank each month.
• Paid once a year. Variable pay or a bonus, if you have one.

Only the first group can reach your bank every month. That is the whole reason CTC divided by 12 is the wrong answer.

Employer PF is yours: it stays in your PF account and you can withdraw it under the usual rules. Gratuity is set aside at about 57.69% of your wages every year, but it is usually paid only if you stay for five years. Leave earlier and that slice of the CTC never reaches you at all.

Follow One Salary, Step By Step

Pick a salary. Every line shows the sum behind the number, so you can check it with a calculator of your own.

Switch between the four salaries and watch which step does the damage. At 5 LPA the biggest deduction is PF, and there is no income tax at all. At 10 LPA there is still none. By 25 LPA income tax takes ₹24,603 a month, against ₹3,000 of PF.

Two things are easy to miss in step 1. The employer’s PF is not a flat 12% of basic. It is 12% of the PF wage, which stops at the ceiling, so it is the same amount for every salary whose basic is above that ceiling. And gross pay is only about ₹14,34,582 a year on a CTC of ₹15,00,000, because the CTC includes the money set aside for you.

Where Each Deduction Comes From

Four deductions take money off your gross pay. Each one has a rule, and each rule is short.

Your PF

PF is 12% of your PF wage. The PF wage is your basic pay, but only up to a ceiling. Since 17 September 2026 that ceiling is ₹25,000 a month, so your PF cannot be more than ₹3,000 a month. It used to be ₹15,000, which capped PF at ₹1,800. Your employer pays another 12% into the same account, and that part is inside your CTC.

The two slips are the same job and the same CTC. Only the month differs. The ceiling rose on 17 September 2026, PF at the ceiling went up by ₹1,200 a month, and in-hand pay fell by the same amount. If an old payslip shows more than a new one, this is almost always why.

ESI, If Your Pay Is Low

If your gross pay is ₹21,000 a month or less, a second deduction appears: ESI, at 0.75% of gross pay. It pays for the medical and cash benefits ESIC provides. Above that ceiling there is no ESI line on your payslip. For most salaries on this page it never applies. It matters on CTCs under 3 LPA.

Professional Tax

Professional tax is a state tax on salary. Your employer deducts it and pays it to the state. States cap it at a few thousand rupees a year, and some do not charge it at all, so the same salary pays different amounts in different cities.

The calculator uses the schedule of the state your city is in. Where a state’s schedule is not modelled yet, it says so instead of guessing.

Income Tax

Your employer works out your tax for the whole year, then deducts a twelfth of it from each month’s pay. That deduction is called TDS, tax deducted at source. The new tax regime is the default, so it is the one used here.

Start with your gross salary for the year and take off the standard deduction of ₹75,000. What remains is your taxable income. Tax is charged slab by slab, so only the income inside a slab pays that slab’s rate.

Then two adjustments. A rebate of up to ₹60,000 cancels the tax completely when taxable income is ₹12,00,000 or less. And 4% health and education cess is added to whatever tax is left. The yearly figure is divided by 12 to get the monthly TDS.

Here is that sum for the 15 LPA salary:

The old regime works differently. Its standard deduction is smaller, and you can claim HRA, 80C and similar deductions, but only if you declare them to your employer. Your employer deducts tax under the regime you tell them to use. The calculator below works out both and shows the cheaper one.

Why Your Payslip May Still Differ

The calculator starts from common choices. Real payslips differ for a handful of reasons, and each of them is easy to spot.

If your slip is off by more than these explain, match each of its lines to the five steps above before you suspect anything else. Offer letters differ in what they call “gross” and “CTC”, and the difference usually hides in one of the lines in the list.

To see your own CTC split into these parts, use the CTC calculator. To go the other way and find the CTC that gives a particular in-hand figure, use the CTC from in-hand calculator.

In-Hand Salary At Common CTCs

If you only want the number, here it is for common salaries. Each row opens a page with the month-by-month working.

These use the calculator’s defaults: Bengaluru, the new tax regime, basic at 50% of fixed pay, PF on the wage ceiling and no variable pay. Change any of them and your figure moves.

The Kept column shows how much of the CTC reaches your bank over the year. It peaks at 12 LPA, where ₹92 out of every hundred rupees of CTC arrives, because that is where income tax is still nil. After that it falls as tax takes a bigger share, to ₹75 at 50 LPA.

Mistakes That Skew The Answer

Most wrong in-hand figures come from one of these five slips.

1. Dividing the CTC by 12. It includes employer PF, gratuity and any variable pay, none of which arrive monthly.
2. Counting the employer’s PF as part of your pay. It is in your CTC and in your PF account. It is not in your bank.
3. Treating variable pay as monthly. It is paid once a year, after tax. A monthly figure that includes it is too high.
4. Using the old PF ceiling. Anything built on a ceiling of ₹15,000 is out of date since 17 September 2026.
5. Claiming 80C or HRA in the new regime. Those deductions apply only if you choose the old regime.

How This Page Was Checked

Every figure on this page comes from the same calculation engine that runs the calculator, so the page and the calculator cannot disagree. The rules behind it, with the source and check date for each, are on the methodology page. If a number on your payslip or on this page looks wrong, tell us and we will check it.