Take-home salary in India is usually 70% to 85% of CTC. At 12 LPA and below, the new tax regime pushes it toward 85%. Cross 20 LPA and it slides closer to 70%. The gap is employer PF, gratuity, your own PF, and income tax, all sitting quietly inside that CTC figure.
That range frustrates people. The offer letter says one number and the bank credit says another. Nobody at HR walks you through the middle. If you want your exact figure rather than a benchmark, the take-home pay calculator does the arithmetic in seconds. The benchmarks below are for everyone comparing offers on the back of a napkin.
One note before the numbers: this is India-specific math. The broader logic of gross vs net salary applies anywhere in the world, but CTC is its own animal.
Why in-hand salary is less than CTC
Cost to company is exactly what it sounds like: every rupee your employer spends on you. Not every rupee that reaches you. The whole CTC vs in-hand salary confusion exists because two separate haircuts happen between the offer letter and your salary account.
Haircut one turns CTC into gross salary. Employer PF and gratuity leave here, because your company pays them on your behalf without ever routing them through your account. Haircut two turns gross into net. Your own PF contribution and monthly income tax (deducted as TDS) come out at this stage, and most states skim a small professional tax on top, capped at ₹2,500 a year.
Neither haircut is optional. Which is exactly why quoting a fat CTC works so well on freshers.
Take-home percentage by CTC band
So what percentage of CTC is take home salary in practice? The table assumes a plain structure: basic pay at 50% of CTC, employer PF and gratuity inside the package, no variable pay, and the new regime slabs from the February 2025 budget. Budgets fiddle with slabs, so verify the current year’s numbers before resigning from anything.
| Annual CTC | Approx. monthly in-hand | Take-home as % of CTC |
|---|---|---|
| 6 LPA | ₹42,600 | 85% |
| 12 LPA | ₹85,400 | 85% |
| 18 LPA | ₹1,18,100 | 79% |
| 24 LPA | ₹1,51,000 | 75% |
| 36 LPA | ₹2,09,200 | 70% |
Notice the cliff after 12 LPA. The Section 87A rebate keeps tax at nil up to ₹12 lakh of taxable income, and beyond that the slabs bite for real. For a quick mental check during an interview, take 80% of CTC and divide by 12 (honestly, 80% is easy math and close enough between 12 and 24 LPA). Below 12 LPA it is pessimistic. Above 24 LPA it flatters, so run big offers through a proper calculation.
Does CTC include PF and gratuity? Yes, and more
Employer PF is 12% of your basic pay, deposited with the Employees’ Provident Fund Organisation. It is your money eventually. It is not your money this month. Gratuity accrual is about 4.81% of basic, and you only collect it after five years at the same employer. Both sit inside CTC, and together they absorb roughly 8% of the package before gross salary is even calculated.
A typical CTC salary structure breakup hides a few other passengers too:
- Variable pay, often 10% to 30% at senior levels, paid quarterly or annually against targets
- Group health insurance premiums the company pays for your family
- One-time joining bonuses that inflate year-one CTC and then vanish
- ESOPs, valued at whatever number made the offer look best
None of these appear in the monthly credit. All of them appear in the headline number. That asymmetry is the whole game.
How to calculate in-hand salary from CTC: a 12 LPA example
Here is the full walk from offer letter to bank credit for a ₹12,00,000 package. The same five steps work for any CTC.
Step 1: fix the basic. At 50% of CTC, basic pay is ₹6,00,000 a year.
Step 2: remove employer costs. Employer PF is 12% of basic (₹72,000) and gratuity is 4.81% of basic (₹28,860). Gross salary comes to 12,00,000 minus 1,00,860, which is ₹10,99,140.
Step 3: list your deductions. Your own PF matches the employer’s ₹72,000. Professional tax adds about ₹2,400 a year in states that levy it.
Step 4: compute tax. Gross minus the ₹75,000 standard deduction leaves taxable income of ₹10,24,140. Under the new regime, the Section 87A rebate wipes out tax on taxable income up to ₹12 lakh. Tax payable: zero. (Yes, actually zero. This surprised a lot of people in 2025.)
Step 5: add it up. Annual in-hand is 10,99,140 minus 74,400, which is ₹10,24,740, or about ₹85,400 a month. That is 85.4% of CTC.
The in-hand salary for 12 LPA drops fast when the structure changes. Carve out 10% as variable pay and the fixed monthly credit falls to roughly ₹76,500, with the balance arriving whenever finance processes the annual payout. Every deduction line on the payslip itself is decoded in our guide to payslip deductions.
Why your percentage might come in lower
Basic pay is the biggest lever. Some companies set it at 40% of CTC and others at 60%. Since both PF contributions scale with basic, a higher basic means a thinner monthly credit (and a fatter retirement account, to be fair). Employers who contribute PF on full basic rather than capping it at the statutory ₹1,800 a month amplify the same effect. Good for your sixties, hard on your rent.
Variable pay does the rest of the damage. A 25 LPA offer with 20% variable is really a 20 LPA fixed package wearing a nicer jacket, and your monthly percentage should be computed on the fixed part alone.
One more trap: do not confuse your top slab with your actual burden. A 24 LPA earner sits in the 25% slab but pays about 10% of CTC as income tax in the table above. The gap between those two numbers is the subject of our marginal vs effective tax rate guide, and understanding it changes how you negotiate.
Frequently asked questions
What percentage of your CTC do you actually take home?
Most salaried employees in India take home between 70% and 85% of their CTC. Under the new tax regime, a 12 LPA package with a standard structure lands near 85%, while a 36 LPA package drops to roughly 70% because income tax climbs faster than the CTC does.
Why is in-hand salary so much lower than CTC?
In-hand salary is lower than CTC because CTC counts money you never receive monthly. Employer PF, gratuity, insurance premiums, and variable pay all sit inside the CTC figure. Your own PF and income tax then come off the remainder. Most states also skim a small professional tax before the bank credit lands.
Does CTC include employer PF and gratuity?
Yes, CTC almost always includes the employer’s PF contribution and gratuity provision. Employer PF is 12% of basic pay and gratuity accrual is about 4.81% of basic. Together they usually absorb 8% to 9% of a typical CTC before your gross salary is even calculated.
What is the in-hand salary for a 12 LPA CTC?
A 12 LPA CTC gives roughly ₹85,000 per month in hand under the new tax regime, assuming basic pay is 50% of CTC and no variable component. Income tax is nil at this level thanks to the Section 87A rebate, so only PF and professional tax get deducted.
Is CTC a monthly or yearly figure?
CTC is almost always quoted as a yearly figure in India. A 12 LPA offer means ₹12,00,000 per year, since LPA stands for lakhs per annum. Divide by 12 for a rough monthly gross, then subtract deductions, because the monthly credit is always smaller than CTC divided by twelve.
How can I increase my in-hand salary without a raise?
Ask HR to restructure your salary rather than waiting for a raise. Opting for the statutory PF cap of ₹1,800 per month instead of 12% of full basic lifts monthly take-home immediately. Comparing tax regimes at filing time and moving part of the package into reimbursable allowances also helps where offered.
Benchmarks get you into the right ballpark, and your own offer deserves exact math. The take-home pay calculator gives you the monthly figure before the HR call even ends. Negotiate from the real number, not the headline one.