Salary Calculator

Salary Calculator — Find Your Gross Salary, Net Take-Home, and Understand Every Component of Your Pay

Your salary slip has many line items — Basic, HRA, Special Allowance, Transport, PF deduction, Professional Tax, TDS — but most employees know only the final number credited to their account. This Salary Calculator demystifies the full picture. Enter your basic salary, HRA, allowances, and total deductions, and instantly see your gross salary (what your employer pays) and your net salary (what actually reaches your bank account). It's the clearest way to understand your compensation and plan your finances.

Whether you're evaluating a job offer, comparing two compensation packages, or checking whether your employer's PF deduction is correct, the numbers here give you the clarity you need — instantly. Many employees accept a ₹12 LPA offer without realising the actual take-home is ₹72,000/month after PF, professional tax, and TDS — a ₹20,000/month gap between expectation and reality. Understanding your salary structure before you negotiate puts you in a far stronger position.

The Formulas

• Gross Salary = Basic Salary + HRA + All Allowances
• Net Salary (Take-Home) = Gross Salary − All Deductions

Example: Basic ₹35,000 + HRA ₹14,000 + Allowances ₹8,000 = Gross ₹57,000. Deductions: PF ₹4,200 + Professional Tax ₹200 + TDS ₹1,500 = ₹5,900. Net salary = ₹51,100/month. Annual net = ₹6,13,200. That ₹5,900 monthly deduction is roughly 10.4% of gross — a typical figure for someone in the old tax regime with standard 80C deductions declared. Under the new tax regime, TDS could be lower (no 80C deductions), but the lack of exemptions may push taxable income higher.

Understanding Each Salary Component

Indian salary structures are uniquely complex compared to global norms. Here's what each component actually means and how it affects your finances:

• Basic Salary: The fixed core component, typically 40–50% of CTC. PF, gratuity, and HRA exemption calculations are all based on basic. A higher basic means higher statutory benefits but also higher PF deductions — reducing your immediate take-home. Some employers offer a lower basic with higher allowances to boost take-home, but this reduces your gratuity and PF benefits over time. The sweet spot for most employees is 40–50% of CTC.
• HRA (House Rent Allowance): Usually 40–50% of basic (50% for metro cities, 40% for non-metro). If you pay rent, part of HRA is exempt from income tax under Section 10(13A) — making it one of the most valuable salary components for salaried employees in rented accommodation. The exemption is the minimum of: actual HRA received, 50%/40% of basic (metro/non-metro), or rent paid minus 10% of basic. If you live in your own house, the entire HRA is taxable.
• Special Allowance: Fully taxable but flexible — employers use it to fill the gap between basic+HRA and the offered CTC. No statutory exemption applies. This is often the largest component in modern Indian salary structures, especially at IT companies where the basic is kept moderate and special allowance absorbs the rest.
• Transport/Conveyance Allowance: Fully taxable since FY 2018-19 (merged into standard deduction). Some companies still list it separately on the payslip, but it no longer provides any tax advantage.
• Medical Allowance: Fully taxable unless reimbursed against bills; the old ₹15,000 exemption was removed and replaced with the standard deduction. If your company reimburses medical expenses against actual bills, that amount is tax-free — but the allowance itself, if paid without bills, is fully taxable.
• Leave Travel Allowance (LTA): Exempt for actual travel costs within India (economy class airfare or AC rail fare) for self and family — twice in a block of 4 calendar years (current block: 2022–2025). You must submit actual travel bills to claim the exemption. LTA is a commonly underutilised tax benefit — many employees don't claim it because the bill submission process feels cumbersome, but even a ₹20,000 annual exemption matters over a career.
• Performance Bonus / Variable Pay: Typically paid quarterly or annually; fully taxable in the year of receipt. Often not included in monthly net salary calculations until credited. Many companies include "variable pay" in CTC but it's not guaranteed — always ask for the guaranteed fixed component when evaluating an offer.

Key Deductions That Reduce Your Take-Home

• Employee PF (EPF): 12% of basic salary (subject to a minimum of ₹1,800/month for those earning basic ≤ ₹15,000). Your employer also contributes 12% — 8.33% goes to EPS (pension), 3.67% to EPF. Both contributions are exempt from tax. On a ₹50,000 basic, that's ₹6,000/month deducted — a significant hit to take-home, but it's earning a tax-free 8.25% return and building your retirement corpus.
• Professional Tax: Levied by state governments — varies by state (Maharashtra: up to ₹2,500/year; Karnataka: up to ₹2,400/year; Tamil Nadu: ₹1,440/year). Deductible under income tax. Most employees don't notice this ₹200/month deduction, but it adds up. Some states like Delhi don't levy professional tax at all.
• TDS (Income Tax at Source): Your employer deducts tax monthly based on your estimated annual tax liability under your chosen regime. For zero TDS, declare regime and investments via Form 12BB at the start of the year. If you've opted for the new regime, TDS is typically lower (no 80C deductions), but you can't claim HRA, 80C, or 80D benefits.
• ESI (Employee State Insurance): 0.75% of gross salary for employees earning up to ₹21,000/month gross. Provides health and maternity benefits. Employer contributes 3.25%. If your gross exceeds ₹21,000/month, you're not eligible for ESI — most professionals above ₹2.5 LPA don't have this deduction.
• Voluntary Deductions: NPS (National Pension System) contributions (additional 80CCD(1B) benefit of ₹50,000/year), group insurance premiums, company loan EMIs — these are company-specific and reduce take-home but may provide tax or benefit value. NPS is particularly worth considering: the additional ₹50,000 deduction under 80CCD(1B) is over and above the ₹1.5 lakh 80C limit, and employer contributions up to 10% of salary under 80CCD(2) are tax-free even under the new regime.

CTC vs Gross vs Net — The Three Numbers Every Employee Must Know

These three figures represent very different amounts for the same employee:

• CTC (Cost to Company): Everything the employer spends: gross salary + employer PF (12% of basic) + employer ESI (3.25%) + gratuity provision (4.81% of basic) + group insurance + any other benefits. CTC is what recruiters quote; it's always higher than what you receive. A ₹10 LPA CTC might translate to ₹65,000–70,000 monthly take-home — the rest is employer-side contributions and benefits you can't access monthly.
• Gross Salary: Your monthly earnings before deductions — the sum of all allowances and basic. Roughly CTC minus employer-side contributions. This is the number your income tax is calculated on.
• Net Salary (Take-Home): Gross minus all employee-side deductions (PF, PT, TDS, ESI, loan). This is what gets credited to your account. Always compare job offers on this number, not CTC — two companies offering the same CTC can have ₹5,000–10,000 difference in monthly take-home depending on the salary structure.

For a ₹10 lakh CTC: employer PF ≈ ₹57,600, employer ESI (if applicable) ≈ ₹0 (usually above threshold), gratuity provision ≈ ₹28,846. Annual gross salary ≈ ₹9,13,554. After employee PF (₹57,600), PT (₹2,400), and TDS (varies by regime), annual take-home could be ₹7.8–8.2 lakh depending on deductions and tax regime chosen. Use this calculator to model your exact numbers and avoid surprises on the first payslip.

Frequently Asked Questions About Salary