CTC Calculator (Cost to Company to In-Hand) 2026

CTC includes employer contributions like EPF (12%), Gratuity (4.81%), group insurance, and variable bonus. Additionally, income tax TDS, employee EPF, and professional tax are deducted from Gross Pay before your bank credit.

Under the Code on Wages guidelines, Basic Salary + DA typically constitutes 40% to 50% of CTC. A higher basic increases retirement benefits (EPF, Gratuity) while a lower basic increases immediate monthly take-home.

While Gratuity is paid by the employer under the Code on Social Security, 2020 (formerly the Payment of Gratuity Act, 1972) after 5 years of service, Indian corporate offer letters commonly structure it as a cost component (4.81% of Basic) inside the annual CTC.

Under the New Tax Regime (Section 115BAC), lower tax slab rates apply and gross salary up to ₹12.75 Lakhs is effectively tax-free with standard deduction (₹75k) and rebate (87A). Employer PF and gratuity are not taxed, so with basic at 50% that is a CTC of about ₹13.9 Lakhs. The result is higher monthly take-home for most employees without requiring 80C/80D investments.

Ignore the headline and rebuild both as guaranteed cash. Strip out employer EPF, gratuity provisioning at 4.81%, insurance premiums and notional ESOP value, then compare only fixed pay plus any bonus that is contractually guaranteed. A Rs 24 lakh offer with Rs 6 lakh of variable and ESOPs can pay less in hand than a Rs 20 lakh fully fixed offer. Then check the joining bonus clawback period and the notice period on each side.

Variable pay is not guaranteed unless the offer letter says so — it is usually tied to company and individual rating, commonly pays out at 70% to 100% of target, and is taxed as salary at slab rate when paid. ESOP value in a CTC is notional: you owe nothing until you exercise, at which point the difference between fair market value and exercise price is taxed as a perquisite, and any gain after that is capital gains when you sell.

Your employer can pay any amount into your NPS; the limits only decide how much of it is tax-free. Two apply. First, the Section 80CCD(2) deduction (section 124 of the Income-tax Act, 2025): up to 14% of basic + DA in the New Regime, and in the Old Regime 10%, or 14% if your employer is the Central or a State Government. Anything above that is taxed as salary. Second, your employer's PF, NPS and approved superannuation contributions together are tax-free only up to ₹7.5 lakh a year (section 17(1)(h)); the amount above that is a taxable perquisite, and so is the interest or return it earns each year (section 17(1)(i)). For example, with basic of ₹50 lakh, employer PF of ₹6 lakh and employer NPS of ₹7 lakh, all the NPS is within 14%, but ₹5.5 lakh of the ₹13 lakh total is over ₹7.5 lakh and is taxed. With basic at half of CTC and 14% employer NPS, this second limit starts to matter at about ₹58 lakh CTC in the New Regime. This calculator applies both limits to the employer PF and NPS you enter; it does not include superannuation or the yearly return on the excess, so add those yourself if they apply to you.