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Guide

CTC vs In-Hand Salary: Where the Difference Goes Every Month

Updated November 13, 2026 · 2 min read

CTC (cost to company) is what your employer spends on you in a year. It is not what lands in your bank account. Dividing CTC by 12 almost always overstates your monthly pay, because some parts of CTC are paid to other places.

The CTC to in-hand salary calculator estimates the gap. It uses the tax rules for FY 2026-27 (AY 2027-28), which change every year, so check the current rules.

What sits inside CTC

  • Gross salary: basic, HRA and allowances, which is the part paid to you before deductions.
  • Employer PF: your employer’s share of provident fund, usually 12% of the PF wage.
  • Gratuity: about 4.81% of basic salary.
  • Other employer costs: insurance, a joining bonus or variable pay that is not paid monthly.

The calculator removes employer PF and gratuity from CTC to reach gross salary. Then it takes off employee PF, professional tax and income tax.

A worked example

Yearly CTC Rs 12,00,000, basic salary at 40% of CTC, PF on the Rs 15,000 wage cap, employer PF and gratuity included in CTC, and professional tax of Rs 2,400 a year.

  1. Basic salary: 12,00,000 x 40% = Rs 4,80,000 a year.
  2. PF wage: capped at Rs 15,000 a month. Employee PF is 15,000 x 12 x 12% = Rs 21,600 a year.
  3. Employer PF is the same: Rs 21,600.
  4. Gratuity: 4,80,000 x 4.81% = Rs 23,088.
  5. Gross salary: 12,00,000 - 21,600 - 23,088 = Rs 11,55,312.
  6. After employee PF and professional tax: 11,55,312 - 21,600 - 2,400 = Rs 11,31,312.
  7. Income tax and cess then come off this, depending on the regime you choose.

Before income tax, the monthly figure is already about Rs 94,276, against Rs 1,00,000 from CTC divided by 12. The calculator then subtracts the tax to give the final in-hand estimate.

Why basic salary matters

A higher basic salary raises gratuity and, if PF is not capped, PF. A lower basic keeps those smaller but can change HRA and other parts. Most companies set basic at 40% to 50% of CTC.

Variable pay and bonuses

If part of your CTC is variable, it is paid only when targets are met. Put it in the other employer costs field if it is not paid monthly. That gives a more realistic monthly figure.

Steps

  1. Open the CTC to in-hand salary calculator.
  2. Enter your yearly CTC and basic salary share.
  3. Tick or untick employer PF, gratuity and the PF wage cap to match your offer letter.
  4. Choose the new or the old regime and, for the old regime, your total deductions.
  5. Read the monthly in-hand salary.

To pick a regime with more care, see the regime comparison guide. Your payslip is the official figure.

Try it nowCTC to In-Hand Salary CalculatorWork out your monthly in-hand salary from your CTC after PF, professional tax and income tax.Open the tool