Why is my in-hand hike smaller than my CTC hike?
Part of every raise goes to higher income tax, because a bigger slice of your income falls in higher slabs, and to extra PF and gratuity. So a 15% CTC hike usually becomes a smaller percentage increase in take-home pay. The effect is strongest when the raise pushes you across a slab, or past the income level where the new regime’s tax rebate stops.
Why look at the hike after inflation?
If prices rise 6% and your in-hand pay rises 6%, you can buy exactly what you could before. A 10% hike with 6% inflation gives about 3.8% more buying power, before any tax effect. The real figure here compares your new pay with what your old pay would be worth after a year of price rises.
How much of each extra rupee do you keep?
Many people are surprised that only 50 to 65 paise of each extra rupee of CTC reaches them at higher incomes. The rest goes to tax, cess, PF and gratuity. The keep per extra ₹100 figure shows this for your own raise.
Negotiating tip
Ask for the raise in cash components (basic and special allowance) rather than in benefits you may not use. Always compare offers on in-hand salary, not CTC alone. The offer comparison tool does this side by side.
Frequently asked questions
Does this include variable pay?
Yes, if you enter a variable share in Salary structure. In-hand is shown as a monthly average that includes the variable pay after tax, assuming it is paid in full.
Which tax regime is used?
By default, the one that leaves you with more take-home, chosen separately for your old and new salary. You can force the old or new regime under Salary structure.
What is a good hike percentage?
It depends on your industry and role, but a hike that does not beat inflation is a cut in real terms. A switch to a new employer often gives a larger jump than a yearly raise.
Why is the first year lower than the average?
PF, tax and the old-versus-new regime choice can all shift when your CTC changes, so the in-hand rise is not exactly the same percentage as the CTC rise.