Calculate Salary Increment & Growth

Compute your revised salary after a hike, or calculate the exact percentage increase between your current and new CTC structure.

Currency

Current Salary (CTC)

Percentage Hike (%)

Current Salary (CTC)

New / Revised Salary (CTC)

Concept

Gross Salary vs Net Salary

Gross salary is the total compensation before deductions — it includes basic pay, HRA, DA, special allowances, and employer contributions. Net salary (take-home pay) is what reaches your bank account after deducting income tax, EPF, professional tax, and insurance premiums. For a ₹10,00,000 CTC in India, the typical net salary is ₹6,50,000–₹7,80,000 depending on tax regime and city.

Gross-to-Net Salary Calculator

Annual Gross Salary (CTC)

Basic Pay % of CTC

Effective Tax Rate %

Net Annual—

Net Monthly—

Total Deductions—

Components

CTC Salary Structure Explained

A typical Indian CTC is split into 6 major components. Understanding each helps you evaluate offers accurately.

Basic Pay (35–50% of CTC)

The foundation of salary. EPF, gratuity, HRA, and tax calculations are all based on basic pay. Higher basic = higher PF contribution = lower take-home but more retirement savings.

HRA (40–50% of Basic)

House Rent Allowance is tax-exempt up to the least of: actual HRA received, 50% of basic (metro) / 40% (non-metro), or rent paid minus 10% of basic. Maximizing HRA exemption is the easiest tax-saving strategy.

EPF (12% of Basic)

Both employer and employee contribute 12% of basic to the Employees' Provident Fund. On ₹4L basic: ₹48,000/year each. This is deducted from gross but builds a corpus earning 8.15% interest.

Special Allowance (Balancing Figure)

Whatever remains after basic, HRA, and statutory components becomes "special allowance." This is fully taxable and often the largest component by value in high-CTC packages.

Deductions

Common Salary Deductions

5 deductions that reduce your gross salary to net take-home pay.

Income Tax (0–30%)Based on tax slab and regime. Old regime allows deductions (80C, 80D, HRA). New regime has lower rates but no deductions. Calculate both to choose the better option

Employee PF (12% of Basic)Mandatory deduction for salaried employees. Contributes to retirement corpus. Can be withdrawn partially for home purchase or emergencies after 5 years

Professional Tax (₹200/month max)State-level tax capped at ₹2,500/year. Not all states levy it. Applicable in Maharashtra, Karnataka, West Bengal, AP, and Telangana

Group Insurance PremiumEmployer-provided health and life insurance. Premium ranges ₹3,000–₹15,000/year depending on coverage and family size. This is a deduction from CTC, not from gross salary

Gratuity (4.81% of Basic)Employer contribution payable after 5 years of service. Calculated as: (15 × Last Drawn Basic × Years of Service) ÷ 26. Deducted from CTC but not from monthly pay

Example

CTC ₹12,00,000 — Complete Breakdown

Here's a detailed salary breakdown for a software engineer in Bangalore earning ₹12 LPA with 40% basic pay.

Gross CTC = ₹12,00,000

₹12,00,000

Total deductions = ₹2,52,100

Employee PF: ₹57,600 | Income Tax: ₹1,69,000 | Professional Tax: ₹2,500 | Insurance: ₹4,900 | Gratuity: ₹23,100 (from CTC)

−₹2,52,100

Net take-home = ₹9,47,900/year (₹78,991/month)

Take-home is 79% of CTC. The remaining 21% goes to tax, PF, and other statutory deductions.

₹78,991/mo

FAQ

Frequently Asked Questions

What is the difference between CTC and gross salary?

CTC (Cost to Company) includes all employer expenses — salary, PF contribution, gratuity, insurance, and perks. Gross salary is CTC minus employer-only contributions (employer PF, gratuity, insurance). CTC is always higher than gross salary by 8–15%.

How to calculate net salary from CTC?

Net Salary = CTC − Employer PF − Gratuity − Insurance − Employee PF − Income Tax − Professional Tax. For quick estimation: Net ≈ 65–80% of CTC depending on tax bracket and city.

Is a higher basic pay better or worse?

Higher basic pay increases PF contributions (better for retirement) but also increases taxable income (lower take-home). If you want more take-home now, negotiate for lower basic. If you want a larger retirement corpus, opt for higher basic.

What is the difference between old and new tax regime?

Old regime allows deductions (80C up to ₹1.5L, HRA exemption, 80D) but has higher slab rates. New regime (2024) has lower rates and ₹75,000 standard deduction but no other exemptions. For CTC below ₹12L, new regime is usually better. Above ₹15L with full deductions, old regime may save more.

Does in-hand salary differ by city?

Yes, take-home salary differs by city due to professional tax (varies by state) and HRA exemption (50% of basic for metro cities vs 40% for non-metros). An employee in Mumbai may have ₹5,000–₹15,000 more HRA tax savings annually compared to a Tier-2 city.

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