Salary Calculator
Calculate your take-home salary and understand your CTC breakdown components
Understanding Salary Structure
Your salary structure consists of various components that determine your take-home pay. Understanding these components helps you negotiate better salary packages and plan your finances effectively. The Cost to Company (CTC) includes all benefits and contributions made by the employer, while your take-home salary is what you actually receive after deductions.
Key Salary Components
Earnings (Gross Salary)
- Basic Salary: Core salary (40-50% of CTC)
- HRA: House Rent Allowance
- DA: Dearness Allowance
- Conveyance: Travel allowance
- Medical: Medical reimbursement
- Special Allowance: Balance amount
- Performance Bonus: Variable component
Deductions
- Provident Fund (PF): 12% of basic salary
- Professional Tax: State-specific tax
- Income Tax (TDS): As per tax slab
- ESI: Employee State Insurance
- Meal Coupons: Pre-tax benefit
- Other Deductions: Loans, advances
Basic Salary and its Importance
- Foundation: Forms the basis for calculating HRA, PF, and other components
- PF Calculation: Both employee and employer PF contributions are based on basic salary
- Gratuity Calculation: Used for calculating gratuity benefits
- HRA Exemption: HRA exemption is calculated as percentage of basic salary
- Minimum Wages: Must comply with minimum wage laws
- Typical Range: Usually 40-50% of gross salary
House Rent Allowance (HRA)
- Tax Benefit: Partially exempt under Section 10(13A)
- Calculation Basis: Usually 40-50% of basic salary
- City Classification: 50% for metro, 40% for non-metro cities
- Exemption Rules: Minimum of actual HRA, rent paid minus 10% basic, or city percentage
- Documentation: Requires rent receipts and rent agreement
Provident Fund (PF) Deductions
- Employee Contribution: 12% of basic salary (mandatory for eligible employees)
- Employer Contribution: 12% of basic salary (3.67% EPF + 8.33% EPS)
- PF Ceiling: Contributions capped at basic salary of ₹15,000
- Higher Voluntary Contribution: Employee can contribute more than 12% (VPF)
- Tax Benefit: Employee contribution deductible under Section 80C
Professional Tax
Professional tax is a state-level tax levied on salaried individuals. The amount varies by state and income level:
- Maharashtra: ₹200-₹2,500 per month
- Karnataka: ₹200-₹1,000 per month
- Tamil Nadu: ₹125-₹1,500 per month
- Delhi: No professional tax
- Gujarat: ₹200-₹800 per month
- Deducted monthly from gross salary
Income Tax (TDS) on Salary
- TDS Deduction: Tax deducted at source by employer
- Tax Slabs: As per applicable income tax slabs for the financial year
- Deductions: Section 80C, 80D, HRA exemption, standard deduction
- Form 16: Employer provides annual salary details and TDS certificate
- Tax Planning: Plan investments to optimize tax outgo
Other Allowances and Benefits
Taxable Allowances
- Special Allowance: Fully taxable
- Leave Travel Allowance: Exempt twice in 4 years
- Medical Allowance: Taxable (fixed ₹15,000/month tax-free)
- Children Education: ₹100/month per child tax-free
Perquisites
- Company Car: Taxable based on usage
- Accommodation: Taxable as per rules
- Club Membership: Taxable perquisite
- Stock Options: Taxed as perquisite
CTC vs Take-Home Salary
Cost to Company (CTC)
- Employee's gross salary
- Employer's PF contribution
- Employer's ESI contribution
- Gratuity provision
- Other benefits (insurance, meals)
- Annual bonus and incentives
Take-Home Salary
- Gross salary minus deductions
- Employee PF contribution
- Professional tax
- Income tax (TDS)
- Other statutory deductions
- Actual amount received monthly
Tips for Salary Optimization
- Structure Optimization: Structure salary to maximize tax benefits
- Maximize HRA: Negotiate higher HRA component
- Tax Planning: Utilize all available deductions under Section 80C, 80D
- Flexible Benefits: Opt for meal coupons, transport allowance
- Retirement Benefits: Consider NPS for additional tax benefits
- Annual Bonus: Time bonus receipt for tax optimization
Understanding Salary Slip
A typical salary slip includes:
- Earnings Side: Basic, HRA, allowances, special pay, arrears
- Deductions Side: PF, ESI, PT, TDS, loan recovery
- Summary: Gross earnings, total deductions, net salary
- YTD Figures: Year-to-date accumulation
- PF Number: Your EPF account number
- PAN/TAN: Tax identification numbers