What is a Salary Calculator?
A salary calculator helps employees understand the structure of their pay, including deductions, benefits, and in-hand salary. It breaks down the Cost to Company (CTC) into various components like Basic, HRA, PF, Gratuity, and Taxable Income.
Formula Used
In-Hand Salary = Gross Salary - (Income Tax + EPF + Professional Tax) CTC = Gross Salary + Employer PF + Gratuity + Bonus + Benefits
Example
Let's say your CTC is Rs. 10,00,000 per year. A simplified breakup might be:
- Basic Pay: Rs. 4,00,000
- HRA: Rs. 2,00,000
- Special Allowance: Rs. 2,50,000
- Employer PF: Rs. 48,000
- Gratuity: Rs. 19,200
- In-hand (approx monthly): Rs. 66,000 after tax & deductions
Benefits
- Clear view of take-home salary
- Understand tax deductions and exemptions
- Helps in salary negotiation and job switching
- Plan monthly finances effectively
Frequently Asked Questions (FAQs)
What is included in CTC?
CTC includes basic pay, allowances, bonus, employer PF, gratuity, and other benefits provided by the company.
Is PF part of in-hand salary?
No, employee PF is deducted from gross salary and credited to your PF account, not your bank account.
Is salary calculator applicable for freelancers?
No, it is generally meant for salaried employees who receive structured CTC from employers.