1. What is CTC and In-Hand Salary?

CTC (Cost to Company) is the total cost an employer spends on an employee in a year, while in-hand salary is the actual amount the employee receives after all deductions.

2. How Does the Calculator Work?

The calculator uses the following formula:

Where:

• \( \text{CTC} \) — Total annual compensation package
• \( \text{Employer PF} \) — Employer's contribution to Provident Fund
• \( \text{Gratuity} \) — Retirement benefit paid by employer
• \( \text{Income Tax} \) — Tax deducted based on income slab
• \( \text{Employee PF} \) — Employee's contribution to Provident Fund
• \( \text{Professional Tax} \) — State-level tax on employment

3. Components of Salary Calculation

Details: Understanding each component helps in salary negotiations and financial planning. CTC includes both direct benefits and statutory deductions.

4. Using the Calculator

Tips: Enter all values in INR (Indian Rupees). For monthly figures, multiply by 12 to get annual amounts. All values must be positive numbers.

5. Frequently Asked Questions (FAQ)

Q1: What's the difference between CTC and take-home salary?
A: CTC is the total cost to company, while take-home is what you receive after all deductions.

Q2: Is PF contribution mandatory?
A: For organizations with 20+ employees, PF contribution is mandatory for employees earning up to ₹15,000/month.

Q3: How is gratuity calculated?
A: Gratuity = (Last drawn salary × 15/26) × Number of years of service (for employees with 5+ years service).

Q4: What's the professional tax rate?
A: Varies by state, typically ₹200-₹2,500 per year depending on salary.

Q5: Can I negotiate my CTC structure?
A: Yes, you can negotiate which components are part of your CTC to optimize tax benefits.