How do I calculate in-hand salary from CTC?
Take your CTC, subtract the employer's PF contribution and any other employer-paid components to reach gross salary. From that gross, subtract your own PF contribution, income tax and professional tax. What is left is annual in-hand pay; divide by twelve for the monthly figure. On a ₹20,00,000 package that works out to about ₹1,32,513 a month.
Try it on your numbers in the CTC to in-hand calculatorThe four subtractions, in order
CTC is what your employer spends on you, not what you receive, and the two differ by four deductions that come off in a fixed order. First, the employer's own PF contribution: it is inside your CTC but goes to your EPF account, never your bank account. Taking it off leaves gross salary — the figure the rest of the maths runs on.
From gross, three things come off. Your own PF contribution, which is 12% of PF wages — basic salary, or half the package if basic is smaller, under the Code on Social Security's definition of wages. Income tax, deducted monthly as TDS. And professional tax, a state levy of around ₹200 a month where it applies at all. The order matters because income tax is charged on gross, not on CTC — the employer's PF share is never your taxable income in the first place.
Gratuity accrual, employer-paid insurance premiums and any notional perks sit inside CTC in the same way the employer PF share does: real cost to the company, absent from your monthly credit.
Worked on a ₹20 lakh package
Take a CTC of ₹20,00,000 with basic salary at 40% of CTC, the employer's PF inside CTC, and professional tax of ₹200 a month. Basic is ₹8,00,000, but that is less than half the package, so PF runs on ₹10,00,000: under the Code on Social Security, allowances beyond half of pay count as wages. Each side contributes 12% of that — ₹1,20,000 a year. Removing the employer's ₹1,20,000 leaves a gross salary of ₹18,80,000.
Under FY 2026-27 new-regime rules, taxable income is ₹18,80,000 minus the ₹75,000 standard deduction, or ₹18,05,000. The slabs give ₹1,61,000 of tax and 4% cess adds ₹6,440, for ₹1,67,440 payable. Now subtract from gross: ₹18,80,000 − ₹1,20,000 own PF − ₹1,67,440 tax − ₹2,400 professional tax = ₹15,90,160 a year, or ₹1,32,513 a month.
That is 79.5% of the advertised CTC reaching your account. The gap is not a deduction you can appeal — more than half of it is money genuinely saved on your behalf in EPF, and nearly all the rest is tax.
Why two people on the same CTC take home different amounts
The share of CTC labelled basic salary used to be the biggest structural variable, because PF followed basic. Under the Code on Social Security, in force since 21 November 2025, it matters much less: PF runs on wages, and where allowances make up more than half of pay the excess counts as wages too, so PF wages never fall below half the package. On a ₹12,00,000 package, basic at 30%, 40% or 50% now gives the same ₹87,800 a month in hand; only a basic above half moves it — to ₹85,400 at 60%, with the ₹2,400 difference sitting in EPF rather than lost.
What still separates two people on the same CTC is how their employer applies PF. One that caps it at the ₹25,000 statutory wage ceiling deducts ₹3,000 a month from each side however large the package is; one that puts the employer's contribution on top of the CTC rather than inside it pays a larger gross for the same headline.
The second variable is variable pay. A CTC letter usually counts the full performance bonus, but that money arrives once or twice a year, if targets are met, so the monthly credit is calculated on the fixed portion alone. Comparing two offers on headline CTC without checking the fixed-versus-variable split compares two different things.
What a quick estimate leaves out
The calculation above models tax under the new regime, PF at 12% of PF wages for both sides (basic, or half the package if basic is smaller), and professional tax as you enter it. Some employers instead cap PF at the statutory wage ceiling — ₹25,000 a month since 17 September 2026, up from ₹15,000 — so each side pays ₹36,000 a year however large PF wages are. On the same ₹20 lakh package that leaves about ₹1,45,057 a month in hand, with ₹1,84,912 of tax, because more of the CTC stays in taxable gross. The calculator has a switch for it.
It does not model ESI, employer NPS under Section 80CCD(2), gratuity accrual, or non-cash perks — all of which shift the figure.
It also assumes the new regime. If you have substantial rent, a home loan or a filled 80C, run both regimes on your own numbers first, because the tax line in this calculation is the one that changes.
CTC to in-hand
Questions people ask
How do I calculate in-hand salary from CTC?
Subtract the employer's PF contribution from CTC to get gross salary, then subtract your own PF (12% of PF wages), income tax and professional tax from that gross. Divide the result by twelve for monthly take-home pay.
How much of my CTC do I actually receive?
On the new regime it typically ranges from about 88% of CTC on packages small enough that no tax is due, down to roughly 74% at ₹30,00,000, because tax rises faster than pay does. PF accounts for most of the remainder.
Is income tax calculated on CTC or on gross salary?
On gross salary, after the standard deduction. The employer's PF contribution sits inside CTC but is not your income, so it is excluded before tax is computed. Using CTC as the base overstates your tax.
What is the in-hand salary for a ₹20 LPA package?
About ₹1,32,513 a month, taking basic at 40% of CTC, professional tax at ₹200 a month and tax under the FY 2026-27 new regime. A different basic percentage or state moves the figure.
Does the employer PF contribution count as my salary?
It is part of your CTC and it is genuinely your money, but it goes into your EPF account rather than your bank account, and it is not taxed as salary income. That is why it comes off before gross is worked out.
Why is my monthly credit lower than the calculator says?
Common reasons are variable pay counted in your CTC but paid annually, a mid-year TDS recalculation catching up across remaining months, employer NPS or insurance inside CTC, or a company-specific deduction such as a canteen or transport recovery.
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Try it nowLast updated 28 September 2026. Figures reflect FY 2026-27 and are educational estimates, not advice. Muktify is not SEBI-registered and never recommends or ranks any instrument. How we write and check guides.