You got an offer of ₹8 lakhs CTC. You calculate ₹66,667 per month. Your first salary credit arrives: ₹51,000. Sound familiar? The gap between CTC and in-hand salary confuses millions of Indian employees every year. Here is a complete breakdown.
CTC is the total annual cost your employer incurs to employ you. It is not what you take home — it includes everything the company spends on you, including components you never receive as cash.
CTC typically includes: Basic salary, HRA, Special allowance, LTA, Medical allowance, Employer's PF contribution (12% of basic), Gratuity provision, Performance bonus, and perks like meal vouchers or phone reimbursement.
Gross salary is your CTC minus the employer's contributions (PF and gratuity) paid by the company on your behalf but not to you directly.
Gross Salary = CTC − Employer PF contribution − Gratuity provision
For a CTC of ₹8 lakhs: Employer PF ≈ ₹38,400/year, Gratuity ≈ ₹18,462/year. Gross Salary ≈ ₹7,43,000/year or ₹61,917/month.
In-hand salary is what actually gets credited to your bank account after all employee-side deductions:
Basic: ₹3,20,000 | HRA: ₹1,28,000 | Special Allowance: ₹2,56,000 | LTA: ₹20,000 | Medical: ₹15,000 | Employer PF: ₹38,400 | Gratuity: ₹18,462
Monthly Gross: ₹61,917
Deductions: Employee PF ₹3,200 + Professional Tax ₹200 + TDS ≈ ₹1,500
Monthly In-Hand: approximately ₹57,000
💡 Use the free Salary Calculator on DigitCalc to enter your CTC and see your estimated monthly in-hand salary broken down component by component.
Find out your exact in-hand salary from your CTC — free, instant, no login.
Try Salary Calculator →Q: Is PF deduction mandatory?
A: Yes, for organisations with 20+ employees, PF at 12% of basic salary is mandatory for employees earning basic up to ₹15,000. For higher salaries, most companies still deduct it as per company policy.
Q: Can I negotiate my salary structure?
A: In many companies, yes. You can optimise your CTC to maximise in-hand salary by increasing tax-free allowances like HRA, LTA, and flexible benefits, and reducing the basic salary component.