A ₹15 lakh CTC sounds impressive — until you realize your monthly in-hand is only about ₹1 lakh. That's a 20% gap between what the offer letter says and what hits your bank account. The difference? Employer PF (₹90K/year that goes to your EPF, not your wallet), gratuity provision (₹36K/year that you only get after 5 years), professional tax, and income tax. Understanding this breakdown is critical for budgeting, evaluating salary hikes, and negotiating job offers. This guide shows you the exact calculation at every CTC level from ₹5 lakh to ₹50 lakh.
Gross Salary = CTC − Employer PF − Gratuity − Insurance
In-Hand = Gross − Employee PF − Professional Tax − Income Tax
Typical in-hand: 65-85% of CTC (higher at lower CTC, lower at higher CTC due to progressive tax). Use our Income Tax Calculator for exact computation.
CTC to In-Hand Breakdown: ₹5L to ₹50L (New Regime, FY 2025-26)
| CTC | Gross Salary | Employer PF | Employee PF | Income Tax | In-Hand (Annual) | Monthly | % of CTC |
|---|---|---|---|---|---|---|---|
| ₹5L | ₹4.53L | ₹30K | ₹30K | ₹0 | ₹4.21L | ₹35,048 | 84% |
| ₹8L | ₹7.28L | ₹48K | ₹48K | ₹0 | ₹6.77L | ₹56,447 | 85% |
| ₹10L | ₹9.11L | ₹60K | ₹60K | ₹0 | ₹8.49L | ₹70,713 | 85% |
| ₹12L | ₹10.94L | ₹72K | ₹72K | ₹0 | ₹10.20L | ₹84,979 | 85% |
| ₹15L | ₹13.69L | ₹90K | ₹90K | ₹77K | ₹11.99L | ₹99,957 | 80% |
| ₹20L | ₹18.27L | ₹1.20L | ₹1.20L | ₹1.56L | ₹15.48L | ₹1,29,010 | 77% |
| ₹25L | ₹22.85L | ₹1.50L | ₹1.50L | ₹2.63L | ₹18.70L | ₹1,55,827 | 75% |
| ₹30L | ₹27.43L | ₹1.80L | ₹1.80L | ₹3.96L | ₹21.65L | ₹1,80,409 | 72% |
| ₹50L | ₹45.75L | ₹3.00L | ₹3.00L | ₹9.67L | ₹33.05L | ₹2,75,439 | 66% |
Key insight: Up to ₹12L CTC, you keep 85% as in-hand (zero tax under new regime thanks to Section 87A rebate and ₹75K standard deduction). Above ₹15L, the percentage drops steadily as income tax bites harder. At ₹50L CTC, you lose a third of your package to employer PF, employee PF, and tax. This is why negotiating fixed pay (not just CTC headline) matters enormously — and why choosing the right tax regime is critical at ₹15L+ CTC.
Where Your CTC Goes: Component Breakdown
| Component | What It Is | % of CTC (typical) | Reaches Your Bank? |
|---|---|---|---|
| Basic Salary | Fixed base; determines PF, HRA, gratuity | 40-50% | Yes (minus deductions) |
| HRA | House Rent Allowance | 20-25% | Yes (partially tax-exempt in old regime) |
| Special Allowance | Remaining amount; fully taxable | 10-20% | Yes |
| Employer PF | 12% of basic; goes to EPF account | 6% | No — goes to EPF |
| Gratuity | 4.81% of basic; paid after 5 years | 2.4% | No — paid on exit after 5yr |
| Insurance | Group health/life insurance premium | 0.5-1% | No — paid to insurer |
| Variable Pay | Performance bonus; not guaranteed | 0-20% | Maybe (depends on performance) |
The components marked in red never show up in your monthly payslip. Employer PF builds your EPF retirement corpus (see EPF interest rate history — currently 8.25%), gratuity is paid only on exit after 5 years, and variable pay depends on company performance. When comparing job offers, focus on the fixed in-hand — that's what pays your EMIs and funds your SIPs. For tax planning: Section 80C, HRA exemption, capital gains tax. For wealth building: step-up SIP, cost of delay, FD real returns, mutual fund real returns, real rate of return. Use our Income Tax Calculator, EPF Calculator, PPF Calculator, SIP Calculator, Inflation Calculator, Purchasing Power Calculator, and Gratuity Calculator.