Salary Breakup Calculator
As per Code of Wages 2019 · EPF Act · Income Tax Act · FY 2024-25
Enter CTC Details
Annual CTC₹12,00,000
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Tax Regime
✅ Code of Wages 2019 — Compliant
Basic+DA = 50% of gross wages (as per new wage code). PF and gratuity computed on correct base.
✅ EPF Act — Compliant
Employee PF: 12% of Basic+DA · Employer PF: 12% of Basic+DA
Monthly In-Hand Salary
₹0
Annual Take-Home: ₹0
Annual deductions
—
Effective tax rate
—
Annual CTC₹0
Gross Salary₹0
Total Deductions₹0
Annual Tax (TDS)₹0
Annual Take-Home₹0
📋 Complete Salary Breakup (Monthly)
| Component | Rule / Basis | Monthly (₹) | Annual (₹) | % of CTC |
|---|
ℹ️ Key Rules Applied:
Basic+DA ≥ 50% of CTC (Code of Wages 2019) ·
HRA = 50% Basic (metro) or 40% Basic (non-metro) ·
Employee PF = 12% of Basic+DA (EPF Act) ·
Employer PF = 12% of Basic+DA (8.33% to EPS capped at ₹1,250/mo, rest to EPF) ·
Gratuity = 4.81% of Basic+DA ·
Standard Deduction = ₹75,000 (New Regime, Budget 2024) / ₹50,000 (Old Regime) ·
Professional Tax varies by state (₹200/month shown if enabled)
On this page
What is CTC and How is it Different from Take-Home Salary?
CTC (Cost to Company) is the total annual expense an employer incurs for an employee — including not just your salary but also employer's PF contribution, gratuity provision, insurance, and other benefits. Your take-home (in-hand) salary is significantly lower than CTC because it excludes employer contributions and deductions like employee PF, TDS, and professional tax.
Many job seekers are surprised when their actual bank credit is far lower than their offered CTC. Understanding the salary structure helps you negotiate better and plan your finances accurately.
Typical Salary Structure Components
| Component | Basis | Taxability |
|---|---|---|
| Basic Salary | ≥50% of gross (Code of Wages 2019) | Fully taxable |
| HRA | 40–50% of Basic (Metro/Non-metro) | Partially exempt (Old Regime) |
| Special Allowance | Balancing figure | Fully taxable |
| Employee PF | 12% of Basic (EPF Act — deducted) | Tax-free (Sec 80C) |
| Employer PF | 12% of Basic (part of CTC) | Tax-free upto ₹7.5L/yr |
| Gratuity (in CTC) | 4.81% of Basic | Tax-free up to ₹20L at exit |
Code of Wages 2019 — The 50% Basic Rule
The Code on Wages 2019 (effective 2021) mandates that an employee's basic wages and DA must constitute at least 50% of their total remuneration (gross wages). This rule was introduced to prevent employers from inflating allowances to reduce PF contributions and gratuity obligations. The impact: higher basic = higher PF deduction, higher gratuity, but also higher HRA exemption eligibility.
How to Negotiate Salary in India
- Negotiate basic salary specifically: Higher basic means higher PF, higher gratuity, and more HRA exemption. Employers often offer more via "special allowances" to keep fixed costs low — push back on this.
- Use market data: Research on LinkedIn Salary, Glassdoor, and AmbitionBox for your specific role, city, and years of experience. Data-backed negotiation is significantly more effective.
- Negotiate at offer stage: Your leverage is highest after receiving an offer but before accepting. Mid-tenure salary revisions are typically limited to annual appraisal cycles.
- Ask for variable pay flexibility: If base is firm, negotiate a higher performance bonus target — more flexible for employers, upside for you.
How to Increase Take-Home Salary Without a Raise
- Switch to New Tax Regime: For most employees under ₹15L CTC with limited deductions, the New Regime lowers TDS, directly increasing monthly in-hand pay.
- Claim all reimbursements: Meal coupons (₹2,200/month tax-free), mobile/internet bills, fuel, books and periodicals. Submitting bills to HR reduces taxable income at zero cost.
- LTA (Leave Travel Allowance): Fully tax-free twice in a 4-year block for domestic travel. Plan holiday travel to coincide with LTA claims.
- Employer NPS contribution: Ask HR to include employer NPS in your CTC restructuring. Deductible under Section 80CCD(2) even under the New Regime — reduces taxable income without extra employer cost.
Frequently Asked Questions
CTC includes components that never reach your bank account — employer's PF (12% of basic), employer's gratuity provision (4.81% of basic), and any insurance or perks. Additionally, deductions like your own PF contribution (12%), professional tax (up to ₹2,400/year), and TDS further reduce your in-hand salary. For a ₹12L CTC, a typical take-home is ₹80,000–₹85,000/month depending on tax regime and deductions.
Both are part of the employer's 12% PF contribution. EPF (Employee Provident Fund) is the main retirement savings account earning 8.25% interest (2024-25). EPS (Employee Pension Scheme) is the pension component — the employer contributes 8.33% of basic salary (capped at ₹15,000 × 8.33% = ₹1,250/month) to EPS. The remaining 3.67% goes to EPF. EPS builds your pension for post-retirement; you cannot withdraw EPS balance directly (you receive monthly pension instead).
If your basic salary exceeds ₹15,000/month at the time of joining, you can opt out of EPF. Existing members cannot opt out. If you choose to continue PF on salary above ₹15,000, you get PF on actual basic (higher savings) but a higher monthly deduction. Most employees with high salaries prefer to continue PF for the tax-free interest and long-term retirement corpus benefits.
Professional Tax is a state-level tax levied on employment and professions. Not all states levy it — Maharashtra, Karnataka, West Bengal, Tamil Nadu, Andhra Pradesh, Gujarat, and a few others do. The maximum is ₹2,500/year nationally. In Maharashtra, the monthly slab goes up to ₹200/month for salaries above ₹10,000. Professional tax paid is deductible from income under Section 16(iii) of the Income Tax Act.