How is EPF (Provident Fund) calculated from salary?

Both employee and employer contribute 12% of basic salary. The employer's 12% is split: 3.67% to EPF and 8.33% to EPS (capped at basic of ₹15,000/month). If basic exceeds ₹15,000, employer EPS is capped at ₹1,250/month. Employee contribution is always 12% of basic. Some companies calculate PF on actual basic while others cap it at ₹15,000 — check your payslip.

Salary Calculator India — CTC to In-Hand FY 2025-26

Q: What is the difference between CTC and in-hand salary?

CTC (Cost to Company) is the total amount your employer spends on you annually, including gross salary, employer PF, gratuity, insurance, and perks. In-hand salary (take-home pay) is what actually reaches your bank account after deducting employee PF (12% of basic), professional tax (up to ₹2,500/year), and income tax (TDS). For most Indian salaried employees, in-hand salary is typically 65-85% of CTC depending on salary structure and tax bracket.

Q: Should I choose old or new tax regime for FY 2025-26?

The new regime (default from FY 2025-26) has lower tax rates with slabs from 0% to 30% and ₹75,000 standard deduction, but does not allow most deductions. The old regime has higher rates but allows 80C (₹1.5L), 80D, HRA exemption, and home loan interest deductions. If your total deductions exceed ₹3-4 lakh, the old regime may save more tax. Without significant investments or HRA claims, the new regime is almost always better.

Q: Why does a higher basic salary reduce my in-hand pay?

Higher basic means larger PF deduction (12% of basic from your salary) and larger employer PF from CTC. With CTC ₹15L: at 40% basic, employee PF is ~₹72,000/year; at 50% basic, it's ~₹90,000/year — ₹18,000 less in-hand. However, PF earns 8.25% tax-free interest and builds retirement corpus. Higher basic also increases HRA and gratuity.

Q: What is Professional Tax and which states charge it?

Professional Tax is a state-level tax capped at ₹2,500/year. States charging PT include Maharashtra (₹200/month), Karnataka (₹200/month), West Bengal, Tamil Nadu, Andhra Pradesh, Telangana, Gujarat, and Kerala. Delhi, Uttar Pradesh, Haryana, and Rajasthan do not levy Professional Tax. PT is deductible from taxable income under both regimes.

CTC ₹12L — what's my actual in-hand salary? Enter your CTC and salary structure to see the complete breakdown including basic, HRA, PF, gratuity, professional tax, and income tax under the new or old regime. Compare two job offers or find which tax regime saves you more.

Enter your CTC to see the complete salary breakdown and monthly in-hand amount

Annual CTC

₹

Your total cost to company as mentioned in offer letter

Basic salary

% of CTC

Typically 40-50% of CTC. Check your payslip.

HRA

% of basic

50% of basic for metro cities, 40% for non-metro

Tax regime

New regime is default. Old regime allows 80C/80D/HRA deductions.

State (for Professional Tax)

Professional tax varies by state. No PT in Delhi, UP, Haryana, Rajasthan.

Employer PF contribution

Usually 12% of basic. Some companies restrict to ceiling of ₹15,000 basic.

PF on actual basic (not capped)

If yes, PF is calculated on full basic. If no, employer PF is capped at ₹15,000 basic.

Claim HRA exemption (old regime)

Available only in old regime. Enter rent below.

Monthly rent

₹

Your actual monthly rent for HRA exemption

Metro city (HRA 50%)

Yes

Delhi, Mumbai, Kolkata, Chennai are metro for HRA calculation

Section 80C (excl. PF)

₹

ELSS, LIC, PPF, tuition fees, etc. Max ₹1.5L including PF.

Section 80D (medical)

₹

Health insurance premium. Up to ₹25,000 (₹50,000 for senior citizens).

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How to Use This Calculator

CTC to In-Hand tab

Enter your annual CTC (from your offer letter), basic salary percentage (typically 40-50%), and HRA percentage (50% for metro, 40% for non-metro). Select your tax regime and state. The calculator shows the complete breakdown: basic, HRA, special allowance, employer PF, gratuity, all deductions, and your exact monthly in-hand salary.

Compare Offers tab

Enter two CTC offers with different salary structures. A higher CTC does not always mean higher in-hand — a company offering 50% basic will deduct significantly more PF than one offering 40% basic. This tab shows which offer actually puts more money in your bank account each month, and also compares PF wealth accumulation.

Old vs New Regime tab

Same CTC, two different tax regimes. The new regime (default from FY 2025-26) has lower rates but no deductions. The old regime has higher rates but allows 80C, 80D, HRA exemption, and other deductions. Enter your investment and rent details in More Options to see which regime saves you more tax.

Share your result

Every input is encoded in the URL. Click Share to send your exact salary breakdown to a friend, HR, or financial advisor.

The Formula

Indian salary calculation involves breaking down CTC into components and applying statutory deductions:

CTC Breakdown:
Basic = CTC × Basic%
HRA = Basic × HRA%
Employer PF = Basic × 12% (3.67% to EPF + 8.33% to EPS, capped at &rupee;15,000/month)
Gratuity = Basic × 15/26 ÷ 12 (4.81% of basic)
Special Allowance = CTC − Basic − HRA − Employer PF − Gratuity

Gross Salary:
Gross = CTC − Employer PF − Gratuity

Deductions:
Employee PF = Basic × 12%
Professional Tax = &rupee;200/month (varies by state, max &rupee;2,500/year)
TDS = Income tax based on regime + 4% cess

In-Hand Salary:
Monthly In-Hand = (Gross − Employee PF − Professional Tax − TDS) ÷ 12

New Regime Tax Slabs FY 2025-26:
Up to &rupee;4L: 0% | &rupee;4-8L: 5% | &rupee;8-12L: 10% | &rupee;12-16L: 15% | &rupee;16-20L: 20% | &rupee;20-24L: 25% | Above &rupee;24L: 30%
Standard deduction: &rupee;75,000. Rebate under 87A for income up to &rupee;12L.

Old Regime Tax Slabs FY 2025-26:
Up to &rupee;2.5L: 0% | &rupee;2.5-5L: 5% | &rupee;5-10L: 20% | Above &rupee;10L: 30%
Standard deduction: &rupee;50,000. Allows 80C (&rupee;1.5L), 80D, HRA exemption.

The EPF wage ceiling for EPS contribution is &rupee;15,000/month. If your basic exceeds &rupee;15,000, the employer's EPS contribution is capped, and the remaining goes to EPF. Employee contribution is always 12% of actual basic (or capped, depending on company policy).

Example

Rahul — Bengaluru software engineer, CTC &rupee;12,00,000

Rahul has a CTC of &rupee;12 lakh with 40% basic and 50% HRA on basic. He is in Karnataka and opts for the new tax regime. PF is on actual basic (not capped).

Step 1: Salary structure

Annual CTC&rupee;12,00,000

Basic (40%)&rupee;4,80,000 (&rupee;40,000/month)

HRA (50% of basic)&rupee;2,40,000

Employer PF (12% of basic)&rupee;57,600

Gratuity (4.81%)&rupee;23,077

Special allowance&rupee;3,99,323

Step 2: Deductions

Gross salary&rupee;11,19,323

Employee PF (12%)−&rupee;57,600

Professional tax (Karnataka)−&rupee;2,400

TDS (new regime)−&rupee;49,920 (approx)

Step 3: In-hand salary

Annual in-hand&rupee;10,09,403

Monthly in-hand&rupee;84,117

In-hand as % of CTC~84%

With a CTC of &rupee;12L, Rahul takes home approximately &rupee;84,000/month under the new regime. If he switches to the old regime with &rupee;1.5L in 80C investments and &rupee;25,000 in 80D, plus HRA exemption on rent of &rupee;20,000/month, his in-hand may differ — use the Old vs New Regime tab to compare.

FAQ

What is the difference between CTC and in-hand salary? ▼

CTC (Cost to Company) is the total amount your employer spends on you annually. It includes your gross salary plus employer contributions like PF, gratuity provision, insurance, and other perks. In-hand salary (take-home pay) is what actually hits your bank account each month after all deductions — employee PF, professional tax, and income tax (TDS). For most Indian salaried employees, in-hand salary is typically 65-85% of CTC depending on the salary structure and tax bracket.

Should I choose old or new tax regime for FY 2025-26? ▼

The new regime (default from FY 2025-26) has lower tax rates and a higher standard deduction of &rupee;75,000, but does not allow most deductions like 80C, 80D, or HRA exemption. The old regime has higher base rates but allows these deductions. Generally: if your total deductions (80C + 80D + HRA exemption + home loan interest) exceed &rupee;3-4 lakh, the old regime may be better. If you have fewer investments or no HRA to claim, the new regime almost always wins. Use the Old vs New Regime tab to compare with your exact numbers.

How is EPF (Provident Fund) calculated from my salary? ▼

Both employee and employer contribute 12% of basic salary to EPF. The employer's 12% is split: 3.67% goes to your EPF account and 8.33% goes to EPS (Employee Pension Scheme), with EPS contribution capped at a basic salary of &rupee;15,000/month. If your basic exceeds &rupee;15,000/month, the employer's EPS contribution is capped at &rupee;1,250/month, and the balance goes to your EPF. Employee's contribution is always 12% of basic. Some companies calculate PF on actual basic, while others cap it at &rupee;15,000 — check your offer letter or payslip.

Why does a higher basic salary reduce my in-hand pay? ▼

A higher basic salary percentage means a larger PF deduction (12% of basic from your salary) and a larger employer PF contribution that comes out of CTC rather than going to your bank account. For example, with CTC of &rupee;15L: at 40% basic, your employee PF is ~&rupee;72,000/year; at 50% basic, it jumps to ~&rupee;90,000/year — that is &rupee;18,000 less in-hand per year. However, the PF money is not lost: it earns 8.25% tax-free interest and builds your retirement corpus. A higher basic also means higher HRA and gratuity, which have their own benefits.

What is Professional Tax and which states charge it? ▼

Professional Tax (PT) is a state-level tax on salaried individuals and professionals. The maximum amount is capped at &rupee;2,500 per year by the Indian Constitution. States that charge PT include Maharashtra, Karnataka, West Bengal, Tamil Nadu, Andhra Pradesh, Telangana, Gujarat, and Kerala — typically &rupee;200/month (&rupee;300 in February for some states). States like Delhi, Uttar Pradesh, Haryana, and Rajasthan do not levy Professional Tax. PT is deductible from taxable income under both old and new regimes.

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