CTC vs In-Hand Salary: How to Estimate Your Monthly Take-Home Pay (FY 2026-27)

CTC stands for Cost to Company: the total amount an employer spends on you in a year. In-hand salary is what reaches your bank account each month. The two are never the same, and the gap is why many people are surprised by their first payslip. This guide explains what sits inside CTC and shows estimates for common packages in FY 2026-27.

For a quick answer, enter your package in the free salary calculator. For common amounts, you can also open ready pages such as ₹12 lakh CTC in hand, ₹18 lakh and ₹6 lakh.

What is inside CTC

• Basic salary: the core fixed pay, often about 40% of CTC. Many other items are linked to it.
• HRA (House Rent Allowance): a part of pay meant for rent. It is taxable unless you claim an exemption in the old regime.
• Special and other allowances: the balance of fixed pay, fully taxable.
• LTA (Leave Travel Allowance): a travel allowance, usually small.
• Employer PF contribution: money your employer pays into your provident fund. It is part of CTC, but it does not come to you monthly.
• Gratuity provision: a yearly provision for gratuity, paid only when you leave after the minimum service period.
• Variable pay or bonus: paid depending on performance, so it is not part of the guaranteed monthly amount.

From CTC to in-hand: the steps

1. CTC minus the employer PF and gratuity gives your gross salary.
2. Subtract the employee PF, which is usually 12% of basic up to a limit.
3. Subtract professional tax, a small state tax that depends on where you work.
4. Subtract the income tax for the year under your chosen regime.
5. Divide what is left by 12 to get your monthly in-hand salary.

A ₹12 lakh CTC, step by step

Using our calculator's typical structure (basic at 40% of CTC, HRA at 50% of basic for a metro city, employer and employee PF capped at ₹21,600 a year each), a ₹12,00,000 CTC works out like this:

Under the new regime, the taxable income is ₹11,55,312 minus the ₹75,000 standard deduction, which is ₹10,80,312. That is below ₹12 lakh, so the Section 87A rebate means no income tax. In-hand pay is about ₹94,276 a month. Under the old regime with no deductions claimed, the tax is about ₹1,42,369 and the in-hand pay is about ₹82,412 a month.

Estimated in-hand pay for common packages

These estimates assume a metro city, professional tax of ₹2,400 a year, no rent, and no deductions claimed in the old regime. They include 4% cess and leave out surcharge.

Claiming HRA, 80C, 80D, NPS or home loan interest under the old regime would reduce the old-regime tax, so your own figure may be lower. Our new vs old regime guide and the income tax calculator show how much you would need to claim before the old regime wins.

Why your payslip may differ

• Salary structure: some employers use a lower or higher basic, which changes PF and HRA.
• Variable pay: if part of your CTC is variable, your fixed monthly pay is lower.
• Other deductions: insurance, meal cards, loans or voluntary PF can change take-home pay.
• PF on the full basic: some employers contribute on the full basic and not the capped amount.
• Professional tax: the amount depends on the state.

Check these before you accept an offer

1. Ask for the full salary breakup, not only the CTC.
2. Ask which part is fixed and which is variable.
3. Check whether the employer PF is capped or on the full basic.
4. Compare the in-hand pay of two offers, and not only the CTC.
5. Use the HRA calculator if you pay rent and plan to choose the old regime.

Gratuity is paid separately when you leave after the minimum service period. The gratuity calculator shows the formula and an estimate. All figures in this article are estimates based on typical structures, so use your offer letter and payslip for the exact numbers.