What is the difference between CTC and gross salary?

CTC is the employer's total cost: gross salary plus the employer's PF contribution, gratuity provision and sometimes insurance. Gross salary is what appears on the payslip before your own deductions.

How much of CTC is in-hand?

Typically 75–85% of CTC reaches the bank, depending on basic percentage, PF basis and tax. A ₹10 lakh CTC usually gives about ₹70,000 a month under the new regime.

Is employer PF part of CTC?

Yes, almost always. The employer's 12% of basic goes to your PF account, not your bank, which is the single largest reason CTC and in-hand differ.

Why is gratuity in my CTC when I may not get it?

Companies include the 4.81% of basic they must provision. You receive gratuity only after five years of service; until then it is a cost to the company but not a benefit to you.

Which regime gives more in-hand?

For most salaried people without large HRA or home-loan interest, the new regime after Budget 2025 gives higher take-home. Use the deduction checker and the income tax calculator to compare with your own figures.

CTC to In-Hand Salary Calculator

What a CTC on an offer letter actually lands in the bank each month, after PF, professional tax and income tax.

Switch tool

Annual CTC (₹)

₹

Basic as % of gross

Employer PF on

Many employers contribute 12% only on ₹15,000 of basic (₹1,800 a month).

Gratuity shown in CTC?

Professional tax (₹ / month)

₹

Tax regime

Take-home

Gross salaryCTC less employer costs

₹ 0

Basic

₹ 0

HRA (50% of basic)

₹ 0

Special allowance

₹ 0

Employer PF

₹ 0

Employee PF

− ₹ 0

Professional tax

− ₹ 2,400

Income tax (new regime)

− ₹ 0

Annual in-hand

₹ -2,400

Monthly in-hand

₹ -200

Indicative only. Assumes a basic + HRA (50% of basic) + special allowance structure, PF at 12% both sides, gratuity at 4.81% of basic when included in CTC, and FY 2025-26 tax rates. Variable pay, ESI, LTA, meal cards and employer insurance differ by company.

How it works

Strip employer costs

CTC includes the employer's PF share and often a gratuity provision. Removing them gives gross salary, the figure on the payslip.

Statutory deductions

Employee PF at 12% of basic (or of ₹15,000 if capped) and professional tax come off gross.

Tax

Income tax on gross after the standard deduction, under the regime you pick, is the TDS the employer deducts each month.

Why CTC and in-hand are so far apart

Cost to company is what the employer spends, not what you receive. The employer's PF contribution, the gratuity it must set aside and sometimes insurance premiums are all inside the number, and none of them reach your account monthly. On the way from gross to net, your own PF share, professional tax and income tax come off. For a ₹10 lakh CTC with a 40% basic, the monthly in-hand is typically ₹68,000–72,000 under the new regime.

Basic drives everything

PF, gratuity and HRA are all percentages of basic. A low basic means more in-hand now but less PF and gratuity later.

PF cap

Employers may limit PF to 12% of ₹15,000. Ask which basis applies; it changes in-hand by up to ₹1,000 a month on a ₹50,000 basic.

New vs old regime

Under the new regime only the ₹75,000 standard deduction applies. The old regime lets you deduct PF, 80C, HRA and more, which matters once rent and investments are high.

Variable pay

Performance bonus inside CTC is paid annually or quarterly, not monthly. Exclude it to see the regular credit.