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💰 Finance ToolCTC Salary Calculator
Find your exact monthly take-home pay from your annual CTC. Full breakdown of basic, HRA, PF, income tax, and professional tax deductions.
CTC vs gross salary vs net salary — what's the difference?
CTC (Cost to Company) is the total annual expense for your employer — it includes basic, HRA, all allowances, employer's PF contribution (12% of basic), and gratuity accrual (~4.81% of basic). Gross salary is what you actually receive before deductions. Net (in-hand) salary is what hits your bank after TDS, employee PF, and professional tax.
A ₹12 LPA CTC typically translates to ₹90,000–₹95,000 gross per month, with ₹75,000–₹80,000 in-hand after deductions. The exact breakup depends on how the employer structures the salary (basic %, HRA %, allowances).
PF contribution and its impact
Employee PF = 12% of basic salary, deducted from your gross. Employer PF = another 12% — included in CTC but never in your pay packet. At 40% basic on a ₹12L CTC: basic = ₹4,800/month, employee PF deduction = ₹5,760/year. PF earns 8.25% interest (FY 2023-24) and is tax-free on withdrawal after 5 years.
Most private sector companies keep basic at 40–50% of CTC. Lower basic reduces PF deductions and increases in-hand pay — which is why many employees request lower basic structures. However, gratuity, provident fund corpus, and leave encashment all get reduced proportionally.
Yes, most companies include gratuity accrual (~4.81% of basic per year) in the CTC. However, gratuity is payable only if you complete 5 continuous years with the employer. So CTC "looks" higher but you may not realise the gratuity component for years.
Professional tax varies by state. Maharashtra and Karnataka charge ₹200/month (₹300 in February). West Bengal and Telangana charge ₹2,500/year. Several states including Rajasthan, UP, and Delhi have no professional tax. It is deducted by employers and remitted to the state government.