What is the difference between CTC and take-home salary?

CTC (Cost to Company) is the total amount a company spends on an employee, including basic salary, allowances, employer PF/ESI contributions, gratuity, and bonuses. Take-home salary (net salary) is what you actually receive after deducting employee PF, professional tax, and income tax. Typically, take-home is 60-75% of CTC depending on your salary structure and tax regime.

How is basic salary calculated from CTC?

Basic salary is typically 40-50% of CTC. Companies set it strategically because a higher basic means higher PF contributions (better retirement savings but lower take-home) and higher HRA exemption. Our calculator uses 40% as the standard basic salary component.

Is EPF mandatory for all employees?

EPF is mandatory for employees earning basic salary up to ₹15,000/month in establishments with 20+ employees. However, many companies extend EPF to all employees. The employer contributes 12% of basic to EPF, and the employee also contributes 12%. For basic above ₹15,000, PF contribution is typically capped at ₹1,800/month.

How does Professional Tax affect my salary?

Professional Tax is a state-level tax on salaried individuals, ranging from ₹150 to ₹200 per month (max ₹2,500/year). It varies by state — Maharashtra charges ₹200/month for salary above ₹10,000, while some states like Rajasthan don't levy it. Professional Tax paid is deductible under Section 16(iii) of the Income Tax Act.

Should I opt for the old or new tax regime for better take-home?

For salaried individuals with CTC up to ₹12 lakh, the new regime usually gives better take-home due to the ₹75,000 standard deduction and rebate under Section 87A. For higher salaries (₹15 lakh+), the old regime may be better if your deductions (80C + 80D + HRA + home loan) exceed ₹3.75 lakh. Our calculator shows take-home under both regimes for easy comparison.

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Salary Breakup & CTC Optimizer

Enter CTC → get optimal salary structure that minimizes tax. Employee mode (take-home) and Employer mode (structure optimizer) with side-by-side comparison.

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Your Annual CTC (₹)

Your take-home varies by state due to professional tax. See professional tax rates by state.

Disclaimer: These tools are for informational assistance only and do not replace professional advice.

CTC to Take-Home Salary Calculator (2025)

Your Cost to Company (CTC) includes your gross salary, employer EPF/ESI contributions, gratuity, and other benefits. Your take-home salary is what you actually receive after deductions for EPF, ESI, professional tax, and income tax. Read our salary structure optimization guide for tax-efficient CTC structuring.

Typical CTC Salary Structure

Basic: 40-50% of CTC | HRA: 40-50% of Basic | EPF: 12% of Basic (max ₹15,000/month) | Gratuity: ~4.81% of Basic | Special Allowance: Remaining balance.

How to Maximize Take-Home

Opt for flexible benefits like meal vouchers (₹50/meal, tax-free), LTA, fuel reimbursement, and NPS (employer contribution up to 10% of Basic is tax-free). Under new regime, standard deduction of ₹75,000 is available. Understanding PF contribution rates and rules is essential to optimizing your in-hand salary.

Frequently Asked Questions

How is gratuity calculated and when am I eligible?

Gratuity is payable after 5 years of continuous service, calculated as (Last drawn salary × 15 × Years of service) / 26. The maximum tax-free gratuity is ₹20 lakh. Learn the full eligibility criteria and calculation method in our gratuity calculation and eligibility guide.

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