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Methodology

How We Calculate In-Hand Salary

Every rule the calculator uses for FY 2026-27, where it comes from, and when we last checked it.

The calculation

What Happens To Your CTC, In Order

  1. Split the CTC. Basic is the share of fixed pay you choose. HRA, your employer's PF, ESI where it applies, gratuity, employer NPS and any benefits follow, and a special allowance takes up the rest, so the lines add up to the CTC exactly.
  2. Work out PF, ESI and professional tax for each month. The PF wage ceiling and the labour-code wages rule are applied by date, so a month before a change and a month after it can differ.
  3. Work out income tax under both regimes. The standard deduction, the HRA exemption and old-regime deductions come off first. Then come the slabs, the rebate, surcharge and cess. The result uses whichever regime leaves you with less tax, unless you pick one.
  4. Spread the tax over the year. Tax on your fixed pay is deducted in monthly parts. The extra tax that variable pay causes is deducted when that pay arrives.
  5. Check that it adds up. The CTC lines must sum to the CTC, the payslip to the take-home, and the twelve months to the year.

Amounts are whole rupees. PF is rounded to the nearest rupee, ESI is rounded up to the next rupee, and taxable income and tax are rounded to the nearest ten rupees. The headline monthly figure describes October 2026, the first full month after the last date-driven change in the year. The payslip view lists every month.

Defaults

What The Calculator Assumes Until You Change It

A visitor who changes nothing gets these. The result shows each one as a chip you can edit.

Default assumptions
Setting Default What it means
Financial year FY 2026-27 Rules for this year apply. FY 2025-26 and FY 2024-25 can be chosen too.
City Bengaluru Karnataka’s professional tax applies, and Bengaluru is a metro city for HRA in FY 2026-27.
Basic pay 50% of fixed pay At 50%, basic is exactly the Code on Wages floor, so the wages definition adds nothing back. A lower basic raises gratuity and shows a notice.
Provident fund PF on the statutory wage ceiling Most employers deduct PF this way. Deducting on full basic needs a joint request accepted by EPFO, so it is an option and not the default.
PF wage basis Basic Follows the EPF Scheme wording. Whether PF follows the Code on Wages is unresolved, so this is a setting.
Tax regime Whichever leaves you more Both regimes are worked out every time, and the result says which one is used and what it saves you.
Variable pay 0% Variable pay is paid once a year, so it is kept out of the monthly figure unless you enter it.

Source levels

How Well Each Rule Is Checked

Every rule below carries one of three levels and the date its source was last checked. A level changes only when someone reads a better source.

A Official source read
The figure was read from the government page or the notification itself.
B Secondary sources agree
Two or more independent law-firm, news or compliance sources agree. The official text was not opened.
C One source, a conflict, or not modelled
Only one source, or sources disagree. The calculator uses a stated choice, or leaves the rule out and says so.

Where a government PDF or Gazette could not be opened, the rule is graded B and the secondary sources we used are linked, with a label that says they are copies or commentary. Where Zishan Khan read the primary document, the rule says so.

Income tax

Income Tax Rules For FY 2026-27

Tax year 2026-27 falls under the Income-tax Act 2025. The earlier years below fall under the Income-tax Act 1961.

Provident fund

PF Rules, And The Wage Ceiling By Date

The PF wage ceiling changed on 17 September 2026. Each month uses the ceiling in force on its days.

  • PF Rates

    Employee: 12% of PF wages

    Employer: 12% of PF wages

    Each amount is rounded to the nearest rupee, with 50 paise rounding up

    A Official source read

    EPF Scheme 1952, paragraphs 26(6) and 29

    Zishan Khan read the primary document on 10 October 2026.

  • PF Wages

    The smaller of the wages drawn in the month and the ceiling in force that month

    The ceiling is not reduced for part-month work

    Default: PF on the statutory wage ceiling. Deducting on full basic is a setting, and it needs a joint request accepted by EPFO

    A Official source read

    EPF Scheme 1952, paragraphs 26(6) and 29

    Zishan Khan read the primary document on 10 October 2026.

  • PF Wage Ceiling From 1 September 2014

    ₹15,000 a month

    B Secondary sources agree

    Ministry of Labour notification, August 2014

  • PF Wage Ceiling From 17 September 2026

    ₹25,000 a month

    A Official source read

    Ministry of Labour S.O. 5109(E), 17 September 2026 (Gazette CG-DL-E-17092026-276299), under section 2(89) of the Code on Social Security 2020

    Zishan Khan read the primary document on 10 October 2026.

    It takes effect from the date of publication. Neither the notification nor the Cabinet release says how to price the month it was published in; the calculator prices that month by days, and says so.

  • September 2026: The Month The Ceiling Changed

    16 days at ₹15,000 and 14 days at ₹25,000, so the month uses ₹19,666.67

    C One source, a conflict, or not modelled

    Assumption of this calculator

    The notification takes effect from its date of publication and says nothing about the month it was published in, so the calculator prices that month by days.

  • PF Wage Basis

    Default: basic, as the EPF Scheme words it

    The 50% wages definition of the Code on Wages is available as a setting

    C One source, a conflict, or not modelled

    EPF Scheme 1952, paragraph 29, and section 2(y) of the Code on Wages 2019

    Whether PF follows the 50% wages definition is not settled in law.

    The calculator works PF on basic by default, as the EPF Scheme words it, and offers the 50% definition as a setting.

ESI

ESI Rates, Ceiling And Rounding

ESI applies only at low monthly gross pay, and your employer's share comes out of your CTC.

  • ESI Rates

    Employee: 0.75% of wages

    Employer: 3.25% of wages

    A Official source read

    ESI (Central) Rules 1950 as amended by G.S.R. 423(E), 13 June 2019, effective 1 July 2019

    Zishan Khan read the primary document on 10 October 2026.

  • ESI Wage Ceiling

    Covered while monthly gross is ₹21,000 or less

    B Secondary sources agree

    ESI (Central) Rules 1950, amendment of December 2016

    The ESIC contribution page does not state the ceiling. A rise has been discussed in the press and nothing is notified.

  • ESI Rounding

    Each share is rounded up to the next whole rupee: employee ⌈wages × 75 ÷ 10,000⌉, employer ⌈wages × 325 ÷ 10,000⌉

    It is not rounded to the nearest rupee: that is PF only

    A Official source read

    ESI (Central) Rules 1950, rule 51; ESIC FAQ, question 16

    Zishan Khan read the primary document on 10 October 2026.

    Each share is rounded up to the next whole rupee, separately. PF is the one that rounds to the nearest rupee.

Labour codes and gratuity

Wages Under The Code On Wages

The Code on Wages changes what counts as wages. Here it changes gratuity, and it changes PF only if you ask for it.

  • Wages Under The Code On Wages

    From 21 November 2025: the larger of basic (with dearness allowance and retaining allowance) and 50% of total remuneration

    Total remuneration includes overtime and the employer’s PF contribution

    It never applies to earlier periods

    Used for gratuity. For PF it is a setting (see PF above)

    A Official source read

    Code on Wages 2019, section 2(y); Ministry of Labour FAQs of 30 December 2025 and 16 March 2026; in force from the date in S.O. 5322(E)

    Zishan Khan read the primary document on 10 October 2026.

    This is the reading used for gratuity. The links are summaries of the Ministry’s FAQs, not the Ministry’s PDF.

  • November 2025: The Month The Rule Started

    The rule applies to 10 of 30 days, and the month is priced by days

    C One source, a conflict, or not modelled

    Assumption of this calculator

    The Ministry gives the date the rule starts and no rule for the month it starts in.

  • Gratuity Accrual

    15/26 of a month's wages for each year of service, which is 4.81% of annual wages

    B Secondary sources agree

    Payment of Gratuity Act 1972, section 4(2)

    The Ministry’s FAQ applies the new wages definition to gratuity from the commencement date. The Act itself was not opened.

HRA

House Rent Allowance And Metro Cities

The HRA exemption lowers tax in the old regime only. The metro rate decides how large it can be.

Professional tax

Professional Tax By State

Each state sets its own schedule. The calculator uses the schedule in force in October 2026 for the whole year.

Of the 36 states and union territories we track, 9 have a schedule we model, 9 charge no professional tax, and 18 are not modelled yet. For those, the result says so and adds nothing, instead of guessing.

Earlier years

FY 2025-26 And FY 2024-25

You can switch the calculator to an earlier year. Only the rules that differ from FY 2026-27 are listed here; every other rule is the same.

Limits

What The Calculator Assumes Or Leaves Out

  • The rules are those in force when we last checked them. For the months to the end of FY 2026-27 they are assumed unchanged. A Budget or a notification can change them, and when one does the rule is updated and an entry is added under "What changed".
  • The two months in which a rule changed part-way, listed under PF and under the Code on Wages, are priced by days. That is our assumption, not a published rule.
  • Whether PF follows the Code on Wages definition of wages is not settled in law. The calculator works PF on basic by default, as the EPF Scheme words it, and lets you choose the other.
  • PF arrears are not modelled.
  • ESI is decided on each month's gross pay. The rule for someone whose wages rise above the ceiling part-way through a contribution period is not modelled, because the sources differ.
  • Professional tax is not modelled for 18 states, and local bodies in Tamil Nadu and Kerala may charge less than the figure used.
  • Your employer's payroll can differ: structure, deduction dates and how tax is spread are the employer's choices. Treat the result as an estimate for planning.

Tests

How The Numbers Are Checked

  • 39 of 41 tax results match the Income Tax Department's online calculator to the rupee. We took the 41 readings on 10 October 2026. They cover both regimes, three financial years and every rebate, marginal-relief and surcharge threshold.
  • 3 more expectations come from the Department's rate page, not from its calculator. They cover the top surcharge band of each regime, where the two disagree.
  • 133 salary cases have their results fixed in tests, so a change that moves a result is noticed.
  • 10,000 random salaries are checked on every change: the CTC lines add up to the CTC, the payslip adds up to the take-home, and the months add up to the year.

The suite runs before any change to the rules or the engine is committed. This page was built on 12 October 2026.

Where We Differ From The Income Tax Department's Calculator

Above ₹2,00,00,000 the Department's calculator and the statute disagree, and we follow the statute. 2 of the 41 readings show it.

Total tax including cess
Case Department's calculator This site
New regime, taxable income ₹2,05,00,000 ₹68,53,080 ₹71,93,680
Old regime, taxable income ₹5,10,00,000 ₹1,96,46,250 ₹2,02,96,250

Just above the top threshold, the Department's calculator charges the next-lower band's rate flat and then jumps to the top rate. The Department's own rate page says tax plus surcharge may not exceed the tax at the threshold plus the income above it. The calculator on this site applies that cap in every band.

What changed

Changes To The Rules And The Method

  1. Method

    Methodology Page Published

    Every rule the calculator uses is listed with its source, how well the source was checked and the date it was checked. The page is built from the same rules the calculator reads.

  2. Rules

    Rules Recorded For FY 2024-25, FY 2025-26 And FY 2026-27

    First record of the slabs, rebate, surcharge, cess, standard deduction, HRA metro cities, PF, ESI, gratuity and the professional tax of each state, each with its source and the date it was checked. From 1 April 2026 the HRA metro list has 8 cities, following the Income-tax Rules 2026.

  3. Rules

    PF Wage Ceiling Applied By Date

    The ceiling is ₹25,000 from 17 September 2026 (Ministry of Labour S.O. 5109(E)) and was ₹15,000 before. Each month uses the ceiling in force on its days, so a month before the change and a month after it differ. PF is worked out on the ceiling by default; deducting it on full basic is an option that needs a joint request accepted by EPFO.

  4. Rules

    Labour-Code Wages From The Commencement Date; ESI Rounds Up

    The Code on Wages definition of wages (at least 50% of total remuneration) applies from 21 November 2025 only, and drives gratuity. Whether PF follows it is left as a setting. ESI is 0.75% for the employee and 3.25% for the employer, each rounded up to the next rupee, on a wage ceiling of ₹21,000.

  5. Checks

    Tax Results Checked Against The Income Tax Department’s Calculator

    41 readings from the Department’s online calculator were recorded and 39 of them match the calculator on this site to the rupee. The other 2 are above the top surcharge threshold, where the Department’s calculator departs from the statute; this site follows the statute and records the difference.

Corrections

If A Number Looks Wrong

Compare it with your payslip first, since employers structure pay and deduct tax in different ways. If the calculator still looks wrong, tell us the CTC, the city, the settings you chose and the figure you expected, and we will check it against the rules above.

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