CTC to In-Hand Salary Calculator
Salary looking lower this year even though your CTC didn't change? India's new Wage Code now requires Basic + DA to be at least 50% of your CTC — which raises PF and gratuity contributions and can reduce your monthly in-hand pay. Enter your details below to see the exact breakdown.
Monthly In-Hand Salary
Why did my in-hand salary drop under the new Wage Code?
India's four new Labour Codes — including the Code on Wages — took effect nationwide on 21 November 2025. The new definition of "wages" requires Basic + DA to be at least 50% of your total CTC. Many companies previously structured salaries with a low Basic (25–35% of CTC) and a large "special allowance" to reduce PF and gratuity outgo. Since PF and gratuity are both calculated on Basic, raising Basic to 50% increases these contributions — which can lower your monthly take-home even though your CTC hasn't changed. The upside: your retirement corpus (PF + gratuity) grows faster.
Employer PF = Employee PF = Basic × 12%
Gratuity provision = Basic × 4.81%
Gross Salary = CTC − Employer PF − Gratuity
In-Hand Salary = Gross Salary − Employee PF − Professional Tax − Income Tax
Worked example: ₹18,00,000 CTC, before vs. after the new Wage Code
| Component | Old structure (30% Basic) | New Wage Code (50% Basic) |
|---|---|---|
| Basic Salary | ₹5,40,000 | ₹9,00,000 |
| Employer PF | ₹64,800 | ₹1,08,000 |
| Gratuity provision | ₹25,974 | ₹43,290 |
| Gross Salary | ₹17,09,226 | ₹16,48,710 |
| Employee PF + Tax + Prof. Tax | ₹1,99,119 | ₹2,31,099 |
| Monthly In-Hand | ₹1,25,842 | ₹1,18,134 |
Same ₹18,00,000 CTC, but the new Wage Code's 50% Basic rule reduces monthly in-hand pay by about ₹7,708 (≈6.1%) — while boosting long-term PF and gratuity savings. Actual numbers depend on your company's specific CTC structure, state professional tax, and tax-saving investments.
Common misconceptions
- "My CTC has been cut." No — your CTC is unchanged. More of it is simply being redirected into PF and gratuity instead of your monthly pay, as required by law.
- "This applies to everyone equally." The impact is biggest for people whose employer previously used a low Basic (below 50% of CTC) to minimize statutory contributions. If your Basic was already 50%+, you'll see little to no change.
- "Professional tax and PF ceiling are the same everywhere." Professional tax varies by state (some states, like Delhi, don't levy it), and the ₹15,000 PF wage ceiling is optional for employers to apply — most mid-to-large companies do not cap it.