How to Calculate In-Hand Salary from CTC
Understand why your in-hand salary is lower than your CTC, which components are deducted, and how to work out your real monthly take-home pay.
By the ToolsHub team · Updated August 21, 2026
The number on your offer letter — the CTC (Cost to Company) — is almost always higher than what actually reaches your bank account. Understanding the gap tells you your real monthly take-home before you accept a job.
Why CTC and in-hand differ
CTC is everything the company spends on you. It bundles two things you never receive as monthly cash — the employer's PF contribution and gratuity — and your gross salary still has deductions taken out: your own PF, professional tax, and income tax. In-hand salary is what remains after all of it.
The steps
- Start with the annual CTC.
- Subtract the employer's PF and gratuity → this gives your gross salary.
- Subtract your own PF (12% of basic), professional tax, and income tax → this is your in-hand.
- Divide by 12 for the monthly figure.
A worked example
On a ₹12,00,000 CTC with basic at 50%, capping PF at the ₹15,000 wage ceiling, in-hand works out to roughly ₹93,795 a month (before income tax). The CTC to In-Hand Salary Calculator shows the full breakdown for your own numbers. Two components are worth checking separately: the tax-free part of your rent allowance with the HRA Exemption Calculator, and any gratuity due when you leave.
Frequently asked questions
- Why is my in-hand salary less than my CTC?
- CTC is the total the company spends on you, including the employer's PF and gratuity, which you never receive monthly, plus your own PF, professional tax and income tax. In-hand is what's left after all of these.
- How do I calculate in-hand salary from CTC?
- Subtract the employer's PF and gratuity to get gross salary, then subtract your PF, professional tax and income tax to get in-hand. The CTC to In-Hand Salary Calculator shows each step.
- What is deducted from CTC?
- The employer's PF contribution, gratuity, your own PF (12% of basic), professional tax (a small state levy), and income tax (TDS). The first two are part of CTC but not paid in hand.
- Is HRA part of in-hand salary?
- HRA is paid to you, so it's part of your salary, but a portion can be exempt from tax if you pay rent. The HRA Exemption Calculator works out the tax-free part.