The calculator below converts CTC to your real monthly in-hand by walking through the same chain HR and payroll use: subtract the costs the employer counts as part of your CTC but never reaches your bank (employer PF, gratuity provision), then subtract the deductions taken from your gross (employee PF, professional tax, TDS).
For most salaried Indians in 2026, take-home is roughly 65-72% of CTC — lower at higher CTCs because TDS scales, higher when 87A rebate kicks in (CTCs near ₹12.75L tend to have very low effective tax under the new regime).
How CTC differs from take-home
CTC (Cost to Company) is the headline number on your offer letter — and it’s bigger than what reaches you in three layers:
Layer 1 — costs the employer pays to others, not you:
- Employer PF: 12% of your basic salary, contributed to your EPF account (3.67%) and EPS pension fund (8.33%, capped at ₹15,000 basic)
- Gratuity provision: 4.81% of basic salary, set aside for the day you eventually get gratuity (only paid out after 5 years)
- Employer ESI (if basic ≤ ₹21,000): 3.25% — ignore this for most salaried IT/finance employees
Layer 2 — what’s deducted from your gross:
- Employee PF: 12% of basic, taken out of your gross monthly
- Professional tax: state-specific; ₹2,400/year average (Maharashtra ₹2,500, Karnataka ₹2,400, West Bengal ₹2,496, Tamil Nadu ₹2,200, Andhra/Telangana ₹2,400; states like Delhi, UP, Punjab don’t levy it)
- Income tax (TDS): based on slabs after standard deduction and any other declared deductions
Layer 3 — what your bank actually receives:
- Take-home = Annual gross − Employee PF − Professional tax − TDS
The calculator above gives a clean breakdown so you can see where each rupee goes. Your actual payslip might show a few extra heads (LTA, food coupons, NPS contribution under 80CCD(2)) which can shift the numbers slightly — but the broad arithmetic is what every payroll system runs.
Worked example: ₹12 lakh CTC, new regime, salaried
A standard fresher-to-mid-level offer in 2026.
- CTC: ₹12,00,000
- Basic at 50% of CTC: ₹6,00,000
| Step | Amount | Notes |
|---|---|---|
| Annual CTC | ₹12,00,000 | Offer letter number |
| − Employer PF (12% × Basic) | ₹72,000 | Goes to your EPF/EPS, never reaches your bank |
| − Gratuity provision (4.81% × Basic) | ₹28,860 | Set aside; paid only after 5 years |
| Annual gross | ₹10,99,140 | |
| − Employee PF (12% × Basic) | ₹72,000 | Goes to your EPF |
| − Professional tax | ₹2,400 | Karnataka rate |
| − Income tax | ₹0 | New regime: taxable ₹10.24L < ₹12L → 87A rebate covers full tax |
| Annual take-home | ₹10,24,740 | 85.4% of CTC |
| Monthly take-home | ₹85,395 |
At ₹12 lakh CTC under the new regime, you keep about 85% of CTC — the highest ratio in the typical CTC range, because the 87A rebate completely zeroes out income tax.
How take-home changes with CTC
Same 50% basic split, new regime, no rent:
| CTC | Annual take-home | Monthly | % of CTC |
|---|---|---|---|
| ₹6,00,000 | ₹5,15,140 | ₹42,928 | 85.9% |
| ₹10,00,000 | ₹8,55,140 | ₹71,262 | 85.5% |
| ₹12,00,000 | ₹10,24,740 | ₹85,395 | 85.4% |
| ₹15,00,000 | ₹12,30,800 | ₹1,02,567 | 82.1% |
| ₹20,00,000 | ₹15,73,260 | ₹1,31,105 | 78.7% |
| ₹30,00,000 | ₹22,61,160 | ₹1,88,430 | 75.4% |
| ₹50,00,000 | ₹35,68,150 | ₹2,97,346 | 71.4% |
| ₹1,00,00,000 | ₹66,80,840 | ₹5,56,737 | 66.8% |
The drop from ~85% at ₹12L to ~66% at ₹1Cr is almost entirely income tax — surcharges kick in above ₹50L (10%), ₹1Cr (15%), ₹2Cr (25%) on top of the 30% slab. Senior management roles with ₹2-5Cr CTC end up with ~58-62% take-home.
Why basic % matters for take-home
The basic salary percentage of CTC has a counterintuitive effect:
| Basic % | Annual take-home (₹15L CTC, new regime) | Monthly | Notes |
|---|---|---|---|
| 30% | ₹13,12,300 | ₹1,09,358 | Lower PF, lower deductions |
| 40% | ₹12,75,920 | ₹1,06,327 | |
| 50% (default) | ₹12,30,800 | ₹1,02,567 | New Wage Code minimum |
| 60% | ₹11,85,680 | ₹98,807 | More forced PF savings |
Higher basic = higher PF contributions = lower take-home but more retirement savings. The New Wage Code (notified, awaiting full implementation) mandates basic ≥ 50% of CTC, so this lever is going away soon — most companies are already restructuring offer letters to comply.
Old vs new regime — when does old win on take-home?
Same ₹15 lakh CTC, basic at 50%:
| Strategy | Annual take-home | Monthly |
|---|---|---|
| New regime (default) | ₹12,30,800 | ₹1,02,567 |
| Old regime, only 80C max (₹1.5L) | ₹12,17,624 | ₹1,01,469 |
| Old regime, 80C + 80D + ₹2L home loan int. | ₹12,57,072 | ₹1,04,756 |
| Old regime, all of above + HRA (metro renter) | ₹13,17,072 | ₹1,09,756 |
Below ₹15L CTC and without large deductions, the new regime almost always wins. With HRA exemption + 80C + 80D + home loan interest stacked, old regime can win at ₹15-25L CTC. Above ₹25L the math shifts back toward new regime even with stacked deductions, because the marginal slab in old regime is 30% vs 30% in new regime but the lower slabs in new regime kick in earlier.
Run both regimes through the calculator with your actual deduction stack to make the call. Don’t go by rules of thumb on this — the cross-over depends heavily on your specific deductions and CTC level.
Frequently asked questions
Why is my employer’s HR portal showing higher in-hand than this?
Three common reasons:
- They’re showing pre-tax monthly gross instead of post-tax in-hand. Check whether their figure is “gross” or “net”.
- They’re not factoring in TDS. Some HR portals show CTC ÷ 12, ignoring all deductions.
- They’re using lower professional tax (e.g., showing the ₹200/month figure for Karnataka but skipping the February ₹300 and the once-a-year top-up of ₹100).
If their number is materially different from the calculator’s output (more than 5%), ask payroll for a detailed monthly breakdown. They’ll usually share it on request.
What is “Special Allowance” and why does my offer letter have it?
Special Allowance is the bucket where employers dump everything that’s not Basic, HRA or specific named allowances. It’s fully taxable and gets deducted at slab rate. It exists because companies want to keep Basic low (lower PF/gratuity provisioning) while still giving you the headline CTC. The New Wage Code is partly aimed at curbing this practice.
Does NPS Tier I (80CCD(1B)) help take-home?
Yes — you can get an additional ₹50,000 tax deduction under section 80CCD(1B) for NPS Tier I contributions, on top of the ₹1.5L 80C cap. Available only under the old regime. For the new regime, NPS deductions don’t help. The calculator above doesn’t include this; if you’re claiming ₹50K NPS, add it to the “Total deductions” field when in old regime.
Is variable pay / bonus included in CTC?
Most companies include the target variable pay in CTC, even though actual payout depends on performance. So if your CTC is ₹15L with ₹2L variable, you should run the calculator at ₹13L for “guaranteed” take-home and ₹15L for “best case”. Ask HR for the fixed CTC number — that’s what to plan against.
What about ESOPs or RSUs?
Equity grants are taxed in two events: at vesting (perquisite tax at slab rate, computed on FMV minus exercise price) and at sale (capital gains tax). They don’t appear in your monthly payslip but show up in your Form 16 perquisite section and your year-end TDS. Use the income tax calculator separately for ESOP planning — it’s a different model from monthly take-home.
Can I optimize my CTC structure with HR?
Yes, depending on company policy. Common levers:
- Shift Special Allowance to LTA (saves tax if you actually travel)
- Add NPS 80CCD(2) (employer contribution up to 10% of basic + DA, deductible in both regimes)
- Food coupons / Sodexo (₹50/meal × 22 days = ₹13,200/year tax-free under both regimes)
- Telephone reimbursement (actuals up to ~₹3,000/month, fully tax-free with bills)
The savings are modest individually but stack to ₹30-50K/year for senior employees. Most large employers have a flexi-benefits portal where you make these elections once a year.
Does take-home include 13th month / PF withdrawal?
No. The calculator shows what hits your bank account every month based on the regular salary structure. Year-end bonuses, performance pay, EPF withdrawals at job change, ESOP cash-outs — all of those are separate one-time events with their own tax treatment.
How accurate is the professional tax assumption?
The calculator uses ₹2,400/year as a representative state average. Actual figures by state (FY 2025-26):
- Maharashtra: ₹2,500/year (₹200/month + ₹300 in February)
- Karnataka: ₹2,400/year (₹200/month)
- West Bengal: ₹2,496/year
- Tamil Nadu: ₹2,200/year (half-yearly)
- Andhra Pradesh / Telangana: ₹2,400/year (₹200/month)
- Delhi, UP, Haryana, Punjab, J&K, Uttarakhand, Rajasthan, Goa, Bihar, Chhattisgarh: No professional tax
If you’re in a non-PT state, your take-home is ₹2,400 higher than the calculator shows. If you’re in Maharashtra, ₹100 lower.
Sources
- Employees’ Provident Fund Organisation (EPFO): contribution rates and rules
- Income Tax Act 1961: Section 10(13A), 80C, 80CCD, 87A; CBDT FY 2025-26 slabs
- Payment of Gratuity Act, 1972: 4.81% provisioning convention
- State-level Professional Tax Acts (Maharashtra, Karnataka, Tamil Nadu, West Bengal etc.)
- New Wage Code (Code on Wages, 2019): basic salary structure rules