CTC Calculator

Employer PF = Basic × 12%

Gratuity = Basic × 4.81%

Gross salary = CTC − Employer PF − Gratuity − Other benefits

In-hand = Gross − Employee PF − Professional tax − Income tax

Gratuity at 4.81% of basic is the standard annual provision used by Indian employers.

A ₹12,00,000 CTC with basic at 40% carries ₹57,600 employer PF and ₹23,088 gratuity, leaving about ₹11,19,312 gross and roughly ₹86,300 monthly in-hand before income tax.

Cost to company is exactly what the name says: everything the employer spends on you in a year. That includes items you never receive as cash — the employer's 12% provident fund contribution, gratuity provision at 4.81% of basic, insurance premiums, the employer's share of ESI, and sometimes notional perks such as a cab facility or a meal card. Comparing two offers on CTC alone can therefore be badly misleading.

The gap between CTC and take-home has three layers. First, employer contributions come out to leave gross salary. Second, employee deductions — PF, professional tax and income tax — come out of gross to leave net pay. Third, variable pay and joining bonuses inflate the annual CTC but arrive quarterly or annually rather than every month.

When you compare offers, convert both to monthly in-hand under the same tax regime. A ₹14 lakh CTC that is 25% variable can easily deliver less monthly cash than a ₹12 lakh fixed CTC, and only the in-hand comparison makes that visible.