Your salary package
More options: HRA, NPS, gratuity, old-regime deductions
Your take-home pay
Monthly salary breakup
Labour Code impact
Reverse: CTC needed for a target in-hand
How in-hand salary is calculated
In-hand salary = CTC − employer PF − gratuity − employer NPS/ESI − your PF − professional tax − income tax.
Your CTC (cost to company) includes money your employer pays on your behalf that never reaches your bank each month: their 12% PF contribution, a gratuity provision of about 4.81% of wages (15 ÷ 26 ÷ 12), and ESI or NPS if they apply. What is left is your gross salary. From that, your own 12% PF, professional tax and monthly TDS are deducted, and the rest is your take-home.
What changed in 2025-26: the 50% wages rule and the ₹25,000 PF ceiling
- 50% wages rule (from 21 November 2025): the Labour Codes define wages as basic + DA + retaining allowance. If HRA, special allowance and other allowances come to more than half of your total pay, the excess is added back to wages for PF and gratuity. With basic at 40% of CTC, wages end up close to 49% of CTC.
- EPF wage ceiling ₹25,000 (from 17 September 2026): the government raised the statutory PF wage ceiling from ₹15,000 to ₹25,000 a month (Gazette notification S.O. 5109(E)). Employers who contribute on the ceiling now deduct up to ₹3,000 a month from you and pay ₹3,000 themselves, instead of ₹1,800 each.
- The effect: take-home pay drops a little for many people, but the same money goes into your PF account and gratuity, so total savings go up. The calculator shows both numbers.
In-hand salary for common CTCs (FY 2026-27)
New regime, PF on the ₹25,000 ceiling, gratuity inside CTC, HRA at 50% of basic and professional tax of ₹2,500 a year.
| CTC | Basic | Income tax / year | In-hand / month |
|---|---|---|---|
| ₹6 lakh | 50% | ₹0 | ₹42,590 |
| ₹10 lakh | 50% | ₹0 | ₹75,122 |
| ₹12 lakh | 40% | ₹0 | ₹91,444 |
| ₹15 lakh | 40% | ₹86,390 | ₹1,08,658 |
| ₹20 lakh | 40% | ₹1,75,150 | ₹1,41,950 |
| ₹30 lakh | 40% | ₹4,42,600 | ₹2,01,040 |
On a ₹12 lakh CTC with basic at 40%, the old rules (PF on ₹15,000, no 50% rule) gave about ₹94,269 a month, so the new rules reduce take-home by about ₹2,825 a month while adding that money to PF and gratuity.
Why is my in-hand so much lower than CTC ÷ 12?
Three reasons. First, employer PF and gratuity are counted in CTC but paid into your PF account or held until you leave. Second, your own PF is deducted from your gross. Third, TDS is spread evenly across the year. Variable pay and performance bonus are often included in CTC but paid only once a year, so leave them out when you enter CTC here.
Want the tax worked out slab by slab, or to compare regimes with more deductions? Use the income tax calculator. To see what your gratuity will be when you leave, use the gratuity calculator.
Frequently asked questions
How do I calculate in-hand salary from CTC?
Subtract employer PF, gratuity and any employer NPS or ESI from your CTC to get gross salary. Then subtract your own 12% PF, professional tax and income tax. For example, a ₹12 lakh CTC with basic at 40% gives about ₹91,444 a month in hand under the new regime in FY 2026-27.
What is the in-hand salary for 12 LPA?
About ₹91,000 to ₹92,000 a month under the new regime when basic is 40% of CTC, PF is on the ₹25,000 ceiling and gratuity is in CTC. Income tax is nil because taxable income stays under ₹12 lakh after the ₹75,000 standard deduction. If PF is deducted on full basic, take-home is lower but PF savings are higher.
Did the new Labour Codes reduce take-home salary?
For many people, slightly. From 21 November 2025 wages for PF and gratuity must be at least 50% of total pay, so structures with a low basic now pay more PF and gratuity. The money is not lost: it goes into your PF account and gratuity.
What is the new PF wage ceiling?
₹25,000 a month from 17 September 2026, up from ₹15,000 (Gazette notification S.O. 5109(E)). Employers that contribute on the ceiling now deduct up to ₹3,000 a month as your share and add ₹3,000 as theirs.
Is gratuity part of CTC?
Many companies include a gratuity provision of about 4.81% of basic in CTC, but you receive it only when you leave after the qualifying service. Untick the gratuity option in the calculator if your offer letter does not include it.
Is professional tax the same in every state?
No. Karnataka, Maharashtra, Tamil Nadu, Kerala and Madhya Pradesh charge up to ₹2,500 a year; Telangana, Andhra Pradesh, West Bengal and Gujarat up to ₹2,400; Delhi, Uttar Pradesh, Haryana and Rajasthan have none. The amount depends on salary slabs, so check your payslip.
When does ESI apply?
Employee State Insurance applies when gross pay is ₹21,000 a month or less. The employee pays 0.75% and the employer 3.25% of gross pay. The calculator adds it automatically.
Which tax regime gives higher in-hand salary?
For most people the new regime, because income up to ₹12 lakh is tax-free with the rebate and the standard deduction is ₹75,000. The old regime can win if you pay high rent and claim large deductions. The calculator shows the difference in monthly take-home.
Sources
- PIB, 16 Sep 2026: EPFO wage ceiling raised from ₹15,000 to ₹25,000 from 17 September 2026
- Gazette notification S.O. 5109(E), 17 Sep 2026 (Ministry of Labour and Employment)
- Code on Social Security, 2020, section 2(88): definition of wages and the 50% rule, in force from 21 November 2025
- Income Tax Department: slabs, rebate and standard deduction for salaried individuals