Take-Home Salary Calculator

The recruiter says twelve lakh and your head divides by twelve. A lakh a month. The first payslip says ₹88,276 and the disappointment is entirely avoidable, because the number was never going to be a lakh. CTC is what you cost the company, not what the company pays you, and the difference is spelt out below.

What CTC contains that never reaches your account

Four inputs.

• Annual CTC, from the offer letter.
• Basic as a percentage of CTC. Look at the salary breakup annexure; 40% is typical, 50% is common at bigger companies, and some startups run it lower.
• Tax regime, new or old.
• Deductions claimed, only if you picked the old regime: 80C, 80D, home loan interest and so on, added up. Your own PF is added to this automatically because it qualifies under 80C.

Two things sit inside CTC that are not salary at all:

The employer’s PF contribution, 12% of basic. It goes to your EPF account with the EPFO, so it is yours in the long run, but it is not in your bank account this month. Of that 12%, 8.33% goes to the pension scheme (on a wage ceiling of ₹15,000, so ₹1,250 a month at most) and the rest to your PF balance.

The gratuity provision, 4.81% of basic. This is the employer setting aside money against the gratuity they will owe you after five years of service. If you leave at four years and eleven months, it was counted in your package every year and you receive none of it. The gratuity calculator shows what is at stake.

Take those off and you get your gross salary, the top line of the payslip. From that comes your own 12% PF, professional tax, and income tax as monthly TDS.

₹12 lakh CTC, month by month

The calculator’s defaults: ₹12,00,000 CTC, basic at 40%, new regime, no deductions.

Basic is ₹4,80,000.

CTC                                       12,00,000
less employer PF        (12% of basic)      -57,600
less gratuity provision (4.81% of basic)    -23,088
                            gross salary  11,19,312

less your PF            (12% of basic)      -57,600
less professional tax                        -2,400
less income tax                                   0
                          annual in-hand  10,59,312

Monthly in-hand	₹88,276
Annual in-hand	₹10,59,312
Share of CTC received	88.3%
Income tax	₹0
Your PF	₹57,600
Employer PF (in CTC)	₹57,600

Income tax is nil here because gross salary minus professional tax minus the ₹75,000 standard deduction lands under ₹12,00,000, and the section 87A rebate under the new regime wipes out the whole liability. The income tax calculator shows that working slab by slab.

So a ₹12 lakh offer pays a little over ₹88,000 a month, and about 11.7% of the headline never turns into cash. The share falls as the salary rises. The same structure at ₹20 lakh CTC gives ₹1,33,599 a month and 80.2% of CTC, with ₹1,63,929 of tax. At ₹30 lakh it is ₹1,86,647 a month, 74.7%.

Flip the same ₹12 lakh offer to the old regime with nothing declared and the in-hand drops to ₹78,284, because ₹1,19,905 of tax appears. Declare ₹2,50,000 of deductions and it recovers to ₹82,698. Still short of the new regime’s ₹88,276, which is the usual result at this income.

Basic percentage: the lever in every offer letter

Nearly every deduction is a percentage of basic, not of CTC. PF on both sides, the gratuity provision, and the HRA exemption limits all scale with it. That makes the basic percentage the one structural number worth arguing about before you sign.

On the same ₹12,00,000 CTC:

Basic	Monthly in-hand	Your PF + employer PF per year
30%	₹91,157	₹86,400
40%	₹88,276	₹1,15,200
50%	₹85,395	₹1,44,000

Moving basic from 30% to 50% costs ₹5,762 a month in cash and adds ₹57,600 a year to the EPF balance across both contributions. Neither is wrong. Someone paying off a personal loan wants the cash; someone renting in Mumbai with a big HRA claim and no other savings might prefer the higher basic. What you should not do is compare a 30%-basic offer and a 50%-basic offer by CTC alone, because the lower-basic one will look worse on paper and pay more each month.

Two related things to check in the annexure. Some employers cap their PF contribution at 12% of ₹15,000 (₹1,800 a month) rather than 12% of actual basic, which raises in-hand pay and cuts retirement savings; the calculator assumes the full 12%. And some show “gratuity” in CTC while others do not, so two offers with identical CTC can differ by 4.81% of basic before anything else is compared.

Professional tax, variable pay and the rest of the payslip

Professional tax is a state levy, capped at ₹2,500 a year by the Constitution. Maharashtra takes ₹200 a month and ₹300 in February, ₹2,500 in all. Karnataka takes ₹200 a month above a salary threshold. Delhi, Haryana, Uttar Pradesh and Rajasthan do not levy it at all. The calculator uses ₹2,400, the common figure; the difference in any direction is under ₹250 a month.

Things a real payslip has that this estimate does not model:

• Special allowance, the balancing figure most employers use to make the structure add up to CTC. Fully taxable, but the calculator already taxes everything above basic as salary, so this is a labelling difference rather than an error.
• Variable pay and joining bonus. In the CTC, paid quarterly or annually if at all, often subject to a clawback if you leave within a year. A ₹15 lakh package with ₹3 lakh variable is a ₹12 lakh package with an upside, and should be entered as ₹12 lakh here to see the guaranteed monthly figure.
• LTA, meal cards, fuel reimbursement. Each has its own exemption rules under the old regime and is simply taxable under the new one.
• Group health insurance premiums that sit in CTC and reach you as cover, never as cash.
• Employer NPS under 80CCD(2), deductible up to 14% of basic in the new regime and one of the few genuine tax savers left there. Not modelled.
• Arrears, leave encashment, notice buyout recoveries. Payslip noise that no annual calculator can predict.

Comparing two offers honestly

Put both through the calculator with their real basic percentages, with variable pay removed, and compare the monthly in-hand figure. Then look at what the difference in employer PF and gratuity provision is worth over the years you actually expect to stay. A ₹1 lakh higher CTC is ₹8,333 a month on paper. At ₹20 lakh with 50% basic, once the extra PF, gratuity provision and tax have come off it, the calculator makes it ₹5,545.

Questions worth putting to HR before accepting: what is the basic percentage, is the employer PF on actual basic or capped at ₹15,000, is gratuity inside the CTC figure, how much is variable and when is it paid, and which state’s professional tax applies. Every one of those changes the number on the first payslip, and none of them is in the headline.