How is in-hand salary calculated?
Your CTC (Cost to Company) is the total an employer spends on you in a year. It includes items you never receive as cash, such as employer PF, gratuity and employer-paid insurance, so your take-home is always lower than CTC ÷ 12.
- Gross salary = CTC − employer PF − gratuity − employer NPS − employer-paid benefits (the “Total annual salary (A)” in many offer letters). It is made of basic, HRA, special and other allowances, and bonus.
- Subtract your employee PF (and any voluntary PF) and professional tax.
- Subtract income tax (TDS) on taxable income after your deductions.
- Divide what remains by 12 for your monthly in-hand salary. Bonus is shown separately because it is paid at a different time.
New tax regime slabs (FY 2026-27)
| Taxable income | Rate |
|---|---|
| Up to ₹4,00,000 | Nil |
| ₹4,00,001 – ₹8,00,000 | 5% |
| ₹8,00,001 – ₹12,00,000 | 10% |
| ₹12,00,001 – ₹16,00,000 | 15% |
| ₹16,00,001 – ₹20,00,000 | 20% |
| ₹20,00,001 – ₹24,00,000 | 25% |
| Above ₹24,00,000 | 30% |
A rebate under section 87A makes income up to ₹12 lakh tax-free (₹12.75 lakh of salary after the ₹75,000 standard deduction). Plus 4% health & education cess, and surcharge on very high incomes.
Which regime is better?
The new regime wins for most people. The old regime can win if you claim large HRA, 80C, 80D and home-loan interest deductions. The meter above shows exactly how much deduction you would need. Read the old vs new regime guide and see in-hand salary at every CTC.
Frequently asked questions
Why is my in-hand salary much lower than CTC/12?
Because CTC includes employer PF and gratuity, and your own PF, professional tax and income tax are deducted before payout.
What PF should I choose?
PF is 12% of basic. Many employers cap it at ₹15,000 of basic (₹1,800 a month). Choose the option that matches your offer letter or payslip, or enter a custom amount.
How is bonus treated?
Bonus or variable pay is taxed together with your other income. The calculator shows your fixed monthly in-hand separately and the bonus after tax, because the bonus is not paid every month. You can also set an expected payout percentage.
Does NPS reduce my tax?
Employer NPS up to 14% of basic (new regime) or 10% (old regime) is not taxed, so opting for it lowers your tax. It also lowers your take-home, because the amount comes out of your CTC and goes into your NPS account. The calculator shows both effects. Voluntary PF comes out of your pay and only reduces tax in the old regime, through the 80C limit.
Is professional tax deductible?
Yes under the old regime. It is not allowed as a deduction in the new regime, but it is still deducted from your pay.
Can I use my payslip instead of CTC?
Yes. Switch to “I have my payslip”, enter your monthly lines, and the calculator estimates your yearly tax, compares the regimes, and checks whether the TDS your employer deducts looks right.