CTC (cost to company) is everything an employer spends on you in a year, including money you never see monthly. In-hand salary is what lands in your account after deductions. The gap is often 20–35%.
What sits inside CTC but not your monthly pay
- Employer PF contribution — usually 12% of basic, goes to your EPF account.
- Gratuity — about 4.81% of basic, paid only after five years of service.
- Variable pay or performance bonus — paid yearly or quarterly, often not in full.
- Insurance premiums, meal cards and other benefits counted at cost.
What gets deducted from your monthly gross
- Employee PF — 12% of basic.
- Professional tax — up to ₹200 a month in most states.
- Income tax (TDS) — depends on your regime and declarations.
Worked example: ₹10 LPA
Assume 10% variable, basic at 40% of fixed, and the new tax regime. Fixed pay is ₹9 lakh; employer PF and gratuity take roughly ₹60,000; employee PF, professional tax and TDS take another ₹75,000–₹90,000. Monthly in-hand lands near ₹62,000–₹65,000, not ₹83,000.
Put your own numbers into the free CTC to take-home calculator, and if you're choosing between two jobs, use the offer comparison calculator to see the real monthly difference.