ReckonBoxHow the take-home salary calculator works
Take-home salary is the money that actually lands in your bank account each month, which is a good deal less than one-twelfth of your CTC because CTC bundles in costs you never receive as cash. This calculator starts from your annual CTC, splits it the way an employer does, and shows the full path down to net pay: the employer contributions that leave CTC first, then your own deductions, so you can see exactly where each rupee goes.
On the default Rs 12,00,000 CTC with basic set at 40%, the new-regime take-home works out to about Rs 88,277 a month, and the old regime to Rs 78,222. Between the CTC and that number sit the employer PF, a pension contribution, a gratuity provision, your own PF, professional tax, and income tax, each of which the breakdown lays out in rupees.
Why in-hand is far below CTC
CTC is the total cost to the company, so it includes money spent on you that never reaches your monthly salary: the employer share of PF, the pension contribution, and a gratuity provision. These come off first. On the default salary they total more than Rs 80,000 a year before a single deduction from your own pay, which is the single biggest reason the monthly figure disappoints people reading their offer letter.
What remains after those employer costs is the gross salary, and only that is split into basic, HRA and special allowance. The calculator marks the employer EPF, employer EPS and gratuity lines clearly, so you can tell CTC-only entries apart from the pay you actually take home.
PF, and the two ways employers deduct it
Employees Provident Fund takes 12% of your basic pay from you each month, and the employer adds another 12%, of which 8.33% goes to the pension scheme (EPS) and the rest to your EPF. The EPS share is capped at Rs 1,250 a month, the 8.33% of the Rs 15,000 statutory wage, which is why the pension line stays flat even as basic rises.
Employers handle the ceiling differently, and it changes your take-home. Some deduct 12% of your actual basic; others cap contributions at the Rs 15,000 wage, fixing PF at Rs 1,800 a month. This tool offers both, because the ceiling-only calculators quietly understate PF for anyone whose basic runs above Rs 15,000. Switch the PF basis to match your payslip.
Gratuity and professional tax
Gratuity is a provision of about 4.81% of basic that sits inside many CTCs, but it is not part of your monthly pay: it's paid only when you leave after at least 5 years of service. The 4.81% comes from the payment formula of 15 days of wages for each year, worked out as 15 divided by 26 and then by 12 months. The calculator keeps gratuity as a CTC line and out of your monthly in-hand, and you can switch it off if your CTC doesn't include it.
Professional tax is the other small deduction, and it depends on your state. It's capped at Rs 2,500 a year across India, but the amount varies: Karnataka charges Rs 200 a month once salary passes Rs 25,000, Maharashtra reaches the Rs 2,500 ceiling over the year, West Bengal uses income bands, and states such as Delhi, Uttar Pradesh, Haryana and Punjab charge none at all. Pick your state and it applies the right figure.
The tax line, and both regimes
The income tax on your salary is worked out on the gross salary after the standard deduction, using the same slabs, 87A rebate and marginal relief as a full return, and the calculator prices both the old and the new regime. On the default salary the new-regime tax is nil, because the taxable figure lands under the Rs 12,00,000 rebate threshold, while the old regime charges more once its extra deductions are exhausted.
Which regime leaves more in hand is a question of your deductions, so the tool shows the monthly in-hand under both, side by side. For the whole regime picture, with 80C, HRA and surcharge worked out in detail, the income tax calculator carries the full breakdown.
What this does not cover
This calculator models a standard salary structure: basic, HRA, special allowance, PF, gratuity, professional tax and income tax. It assumes HRA is 50% of basic and does not compute your HRA exemption from actual rent, so enter that in the other-deductions field if you claim it in the old regime. It also leaves out variable pay and joining bonuses, which are annual rather than monthly, and any company-specific components such as ESOPs or meal cards. Salary structures and tax rules change, so treat the figure as a close estimate and check the exact split on your payslip, and for a tax filing that matters, consult a chartered accountant.
Frequently asked questions
What is take-home salary? Take-home salary is the pay that actually reaches your bank account each month, after the employer contributions that sit inside CTC and the deductions from your gross salary are removed. On a Rs 12,00,000 CTC with basic at 40%, the new-regime take-home is about Rs 88,277 a month.
How is in-hand salary calculated from CTC? CTC first loses the employer EPF, the employer EPS and the gratuity provision, which are costs to the company but never paid to you, leaving the gross salary. From gross come your own EPF at 12% of basic, the state professional tax, and income tax, and what remains is the in-hand pay. This calculator shows every one of those steps.
Why is my in-hand so much lower than my CTC? CTC bundles in things you do not receive as monthly cash: the employer share of PF, the pension contribution, and a gratuity provision you only get after 5 years. On the default Rs 12,00,000 CTC those come to over Rs 80,000 a year before your own EPF and tax, which is why the monthly figure lands well below one-twelfth of CTC.
How much PF is deducted from salary? You contribute 12% of your basic pay to EPF, and the employer adds another 12%, split as 8.33% to the pension scheme (EPS, capped at Rs 1,250 a month) and the rest to EPF. Some employers apply the Rs 15,000 wage ceiling, which fixes the deduction at Rs 1,800 a month, so this tool lets you pick 12% of actual basic or the cap.
Is gratuity part of my monthly salary? No, gratuity is not part of monthly pay. It is a provision of about 4.81% of basic that many employers include in CTC, and it is paid only when you leave after at least 5 years of service. The calculator flags it separately so you can see the CTC it takes without touching your monthly in-hand.
How much is professional tax? Professional tax is a state levy capped at Rs 2,500 a year. Karnataka charges Rs 200 a month once salary crosses Rs 25,000, Maharashtra works out to Rs 2,500 a year, and West Bengal uses income bands, while Delhi, Uttar Pradesh, Haryana and Punjab charge none. Pick your state and the calculator applies the right amount.
Which regime gives a higher take-home? It depends on your deductions, and the calculator shows the monthly in-hand under both regimes side by side. With only EPF to claim, the new regime usually leaves more in hand because of its lower rates and larger standard deduction, but a full 80C, HRA and home loan interest can tip the old regime ahead.
What basic percentage should I use? Enter your actual basic if you know it, since it drives PF, gratuity and HRA. When you do not have the breakup, 40% of CTC is a common assumption and 50% is also used, so the slider defaults to 40% and you can move it to match your offer letter.