Short answer: your monthly in-hand salary is usually about 73–82% of your CTC divided by 12. On a typical ₹10 lakh CTC, expect roughly ₹67,800 a month — not ₹83,333. Here is exactly where the rest goes.
Why in-hand is lower than CTC ÷ 12
CTC (cost to company) is everything your employer spends on you in a year — including money that never reaches your bank account each month:
- Employer's PF contribution — usually 12% of basic. It goes to your EPF account. Still your money, but not in-hand.
- Gratuity — often shown in CTC at about 4.8% of basic. Paid only when you leave after five or more years of service.
- Variable pay or bonus — depends on performance and usually arrives once or twice a year, not monthly.
Then, from what is paid monthly, three more deductions come out:
- Your own PF — another 12% of basic, also into your EPF account.
- Professional tax — a small state tax, up to about ₹2,500 a year in most states that levy it (some states don't).
- Income tax (TDS) — under the new regime, nil if your taxable salary is up to ₹12 lakh.
Worked examples
A common salary structure: basic 40% of CTC, HRA 20%, employer PF 12% of basic, gratuity about 4.8% of basic, variable pay about 7%, the rest as special allowance. New tax regime, tax year 2026-27, professional tax ₹2,400 a year, variable pay excluded from monthly in-hand.
| CTC | Employer PF + gratuity (not in-hand) | Variable pay (yearly) | Income tax for the year | Monthly in-hand | In-hand as % of CTC |
|---|---|---|---|---|---|
| ₹6 lakh | ₹40,344 | ₹41,256 | ₹0 | ≈ ₹40,600 | 81% |
| ₹10 lakh | ₹67,240 | ₹68,760 | ₹0 | ≈ ₹67,800 | 81% |
| ₹15 lakh | ₹1,00,860 | ₹1,03,140 | ≈ ₹81,766 | ≈ ₹94,990 | 76% |
| ₹20 lakh | ₹1,34,480 | ₹1,37,520 | ≈ ₹1,64,428 | ≈ ₹1,22,100 | 73% |
Income tax here includes tax on variable pay and is spread over 12 months; in practice employers may deduct part of it when the bonus is paid. Your own structure will differ — check your offer letter.
Three things worth knowing
1. PF is your money. Both PF contributions sit in your EPF account and earn interest. They reduce take-home, but they are savings, not a cost.
2. Compare offers on in-hand, not CTC. Two ₹12 lakh offers can differ by thousands a month depending on how much is variable pay, gratuity or benefits.
3. Up to ₹12.75 lakh of salary pays no income tax under the new regime, thanks to the rebate and the ₹75,000 standard deduction. Above that, tax rises gradually — see our old vs new regime guide.
Work out your own in-hand
First Salary Money Setup turns your offer letter into your real monthly in-hand, then helps you split it into needs, wants and savings, build an emergency fund and plan goals. Excel or free Google Sheets, ₹399, one payment. Or get it with our full money tracker and tax tools in the Salaried Starter Pack.
Frequently asked questions
How much of my CTC will I get in hand?
Usually about 73–82% of CTC divided by 12. On a typical ₹10 lakh CTC, that is roughly ₹67,800 a month.
Is gratuity part of my salary?
It is often included in CTC but paid only after five or more years of continuous service.
Can I reduce my PF deduction?
Some employers cap PF at ₹1,800 a month (12% of ₹15,000). That raises in-hand but lowers retirement savings. Ask HR what your structure allows.
Is a ₹12 lakh salary tax-free in 2026-27?
Under the new regime, a salary of up to ₹12.75 lakh generally pays no income tax, thanks to the rebate and the ₹75,000 standard deduction.
Why is my first payslip different?
Joining mid-month, tax declarations and one-time deductions often make the first month unusual.
Illustrative examples based on a common salary structure; not tax or financial advice. Your payslip may differ.