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For individualsRates reviewed September 2026

Take-Home Salary and CTC Breakup Calculator

A take-home salary calculator turns the cost to company on your offer letter into the money that actually reaches your bank account. The gap between the two is wide because CTC includes everything the employer spends on you, including its own provident fund contribution and the provision it makes for gratuity, neither of which is paid to you month by month.

The structure follows a familiar order. Basic salary is fixed as a share of CTC, house rent allowance is fixed as a share of basic, the employer's provident fund contribution and the gratuity provision are carved out, and the special allowance absorbs whatever is left. Gross salary is CTC less the employer's retirement contributions, and take-home is gross less your own provident fund, professional tax and the tax deducted at source.

Tax is where the regimes part company. The new regime is the default and offers a ₹75,000 standard deduction under Section 19 of the Income-tax Act, 2025 (Section 16(ia) of the 1961 Act) but no house rent allowance exemption, no professional tax deduction and no Chapter VIA deductions apart from the employer's NPS contribution. The old regime allows all of those against a ₹50,000 standard deduction and steeper slabs, so which one leaves more in hand depends entirely on how much you actually claim.

Since the four Labour Codes came into force on 21 November 2025 the structure itself is constrained. Excluded allowances are capped at 50% of total remuneration, so a package that pushed basic pay down to a fifth of CTC in order to cut provident fund and gratuity cost no longer survives the statutory definition of wages.

Take-Home Salary Calculator

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Most employers use 40% to 50%. The Labour Codes cap excluded allowances at 50% of total remuneration.

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A 50% city for HRA

Delhi, Mumbai, Kolkata, Chennai, Ahmedabad, Bengaluru, Hyderabad and Pune from FY 2026-27.

Only used for the old regime comparison. The new regime allows no HRA exemption.

₹

80C beyond your own PF, plus 80D, home loan interest and 80CCD(1B). Your own PF is already counted inside the ₹1,50,000 ceiling.

₹

A state levy that varies by state. Take the figure from your payslip.

₹

Monthly take-home

₹1,22,046

New regime, ₹14,64,556 a year on a ₹18,00,000 CTC

Basic salary40% of CTC
₹7,20,000
House rent allowance50% of basic
₹3,60,000
Special allowanceThe balancing figure in the package
₹5,98,985
Employer PF and gratuity provision₹86,400 PF and ₹34,615 gratuity, inside CTC but not paid to you
₹1,21,015
Gross salaryCTC less the employer's retirement contributions
₹16,78,985
Employee PF and professional tax₹86,400 PF and ₹2,400 professional tax, deducted from gross
₹88,800
Income tax, new regimeOn ₹16,03,985 after the ₹75,000 standard deduction
₹1,25,629
Income tax, old regimeOn ₹11,88,585 after ₹2,88,000 of HRA exemption and ₹1,50,000 of deductions
₹1,75,838
Annual take-home, new regime₹1,22,046 a month
₹14,64,556
Annual take-home, old regime₹1,17,862 a month
₹14,14,346
  • The new regime is cheaper here by ₹50,210 of tax. The new regime is the default, so staying on the old one needs a positive declaration to your employer each year.
  • Cost to company includes the employer's provident fund contribution and the gratuity provision, neither of which reaches your account. That is most of the gap between CTC and take-home.
  • The gratuity provision is 4.81% of basic a year and vests only after five years of continuous service, so leaving earlier means that slice of CTC was never yours.
  • Professional tax comes out of your pay under both regimes because it is a state levy, but only the old regime allows it as a deduction from salary income.
  • Tax deducted at source is spread over twelve months, so this is the average month. Investment proofs submitted late in the year push the deduction into the closing months.

The formula

Gross = CTC - employer PF - gratuity provision; Take-home = Gross - employee PF - professional tax - income tax

Basic salary
The fixed core of the package, usually 40% to 50% of CTC, on which provident fund, gratuity and the house rent allowance exemption are all computed.
Employer PF
12% of basic wages, part of CTC but paid into the provident fund rather than to you. It is not taxable salary in your hands.
Gratuity provision
Basic salary multiplied by 15 and divided by 26 and again by 12, which is 4.81% of basic a year, the annual cost of the gratuity that vests after five years.
Special allowance
The balancing figure that absorbs whatever CTC is left once basic, house rent allowance and the employer's retirement contributions are fixed. It is fully taxable.
Professional tax
A state levy under Article 276 of the Constitution, deducted from salary in the states that impose it and deductible from salary income only under the old regime.
Standard deduction
₹75,000 under the new regime and ₹50,000 under the old, allowed against salary under Section 19 of the Income-tax Act, 2025.

The gratuity provision is a cost the employer books, not a payment you receive. It vests only after five years of continuous service, so leaving earlier means that slice of CTC was never yours.

How to calculate it

  1. 1

    Carve the employer contributions out of CTC

    Subtract the employer's 12% provident fund contribution and the gratuity provision of 4.81% of basic. What remains is gross salary, which is the figure your payslip and Form 16 start from.

  2. 2

    Fix basic and house rent allowance

    Basic is set as a share of CTC and house rent allowance as a share of basic, commonly 50% of basic in a metro and 40% elsewhere. Both drive the provident fund, the gratuity provision and the rent exemption, so the split is not cosmetic.

  3. 3

    Let the special allowance balance the package

    Whatever CTC is left after basic, house rent allowance and the employer contributions becomes special allowance. It carries no exemption of its own and is taxed in full under both regimes.

  4. 4

    Deduct your own provident fund and professional tax

    Your 12% provident fund contribution and the state professional tax come out of gross pay every month. Both reduce what reaches your account, but only the old regime lets you deduct professional tax from taxable income.

  5. 5

    Compute tax under both regimes

    Run the new regime with only the ₹75,000 standard deduction, then the old regime with the house rent allowance exemption, professional tax, the ₹50,000 standard deduction and your Chapter VIA claims, and compare the totals.

  6. 6

    Spread the tax across twelve months

    Your employer deducts tax at source in roughly equal monthly instalments over the year, so the take-home figure here is the average month. Investment proofs submitted late in the year shift the deduction into the final months.

What CTC contains and where it goes, FY 2026-27

What CTC contains and where it goes, FY 2026-27
ComponentBasisReaches you monthly
Basic salaryA fixed share of CTC, usually 40% to 50%Yes
House rent allowanceA share of basic, commonly 50% or 40%Yes
Special allowanceThe balancing figure in the packageYes
Employer provident fund12% of basic wagesNo, credited to EPF
Gratuity provision4.81% of basic a yearNo, vests after five years
Employee provident fund12% of basic wagesNo, deducted from gross
Professional taxA state levy, varies by stateNo, deducted from gross
Tax deducted at sourceSlab tax spread over twelve monthsNo, deducted from gross

Worked example

Cost to company
₹18,00,000 a year
Basic salary
40% of CTC
House rent allowance
50% of basic
City
A 50% city
Rent actually paid
₹3,60,000 a year
Old regime deductions besides own PF
₹63,600
Professional tax
₹2,400 a year
  • Basic = 40% of ₹18,00,000 = ₹7,20,000, and HRA = 50% of basic = ₹3,60,000
  • Employer PF = 12% of basic = ₹86,400 and the gratuity provision = 4.81% of basic = ₹34,615
  • Gross salary = ₹18,00,000 less ₹86,400 less ₹34,615 = ₹16,78,985
  • New regime tax on ₹16,78,985 less the ₹75,000 standard deduction = ₹1,25,629
  • Old regime tax after the ₹2,88,000 HRA exemption and ₹1,50,000 of deductions = ₹1,75,838

Take-home = ₹1,22,046 a month or ₹14,64,556 a year on the new regime, which beats the old regime by ₹50,210 of tax.

Frequently asked questions

Because CTC counts what the employer spends, not what you receive. The employer's 12% provident fund contribution and the gratuity provision of 4.81% of basic are inside CTC but never reach your account, and from what is left your own provident fund, professional tax and tax deducted at source come out before the salary is credited. On a typical structure that gap runs to a fifth of CTC or more.
Most employers set basic between 40% and 50% of CTC. Since the Code on Social Security, 2020 came into force on 21 November 2025 the choice is constrained: excluded allowances cannot exceed 50% of total remuneration, and where they do the excess is added back into wages for provident fund and gratuity. A higher basic raises your retirement savings and your house rent allowance exemption but lowers immediate take-home.
It depends on what you can actually claim. The new regime is the default, gives a ₹75,000 standard deduction and lower slab rates, and allows nothing else apart from the employer's NPS contribution. The old regime allows the house rent allowance exemption, professional tax and Chapter VIA deductions against a ₹50,000 standard deduction and steeper rates, so it wins only where rent and investments together are large enough to outweigh the rate difference.
No, the employer's ordinary 12% provident fund contribution is not taxed in your hands when it is made, although it sits inside your CTC. Your own 12% contribution is paid out of taxable salary and is eligible for deduction under Section 80C on the old regime. Interest on your own contributions above ₹2,50,000 in a year is taxable under Rule 9D whichever regime you are on.
It is the annual cost of the statutory gratuity formula: basic salary multiplied by 15, divided by 26 for working days in a month, and divided again by 12, which works out to 4.81% of basic a year. It is a provision the employer books rather than money you receive, and it vests only after five years of continuous service, so leaving earlier means that part of the CTC never becomes yours.
Yes, it is still deducted from your salary because it is a state levy imposed under Article 276 of the Constitution and has nothing to do with which income-tax regime you choose. What changes is the deduction: professional tax is allowed against salary income only under the old regime, so on the new regime it reduces your take-home without reducing your taxable income.
Because tax deducted at source is recalculated as the year progresses. Your employer estimates the annual tax in April and spreads it over twelve months, then revises the estimate when you submit investment proofs, change your regime declaration or receive a bonus or increment. Proofs submitted late in the year mean a heavier deduction in the final months and a lighter one afterwards.

Sources

Rates and rules on this page come from the following. This is a working aid, not professional advice: confirm anything material with your Chartered Accountant before you act on it.

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