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Understanding Your Salary: CTC, Gross and In-Hand
Quick Work Studio · 2026-10-01
Your offer letter says one number. Your bank account shows a smaller one. Neither is wrong, they're measuring different things. Here's how to read a salary.
CTC: the headline figure
CTC (Cost to Company) is everything your employer spends on you in a year. It includes your salary, but also their contribution to provident fund, any insurance, gratuity, bonuses and sometimes perks like meal cards. It is deliberately the biggest number, and it is not what you take home.
Gross salary: before deductions
Gross salary is your pay before deductions: basic pay, HRA, and allowances added up. It's lower than CTC because it strips out the employer's own contributions and some benefits.
In-hand (net) salary: what you actually get
In-hand salary is what reaches your account after income tax (TDS), your provident fund contribution, and any professional tax or other deductions. This is the number that matters for your monthly budget.
Why the gap can be large
Between CTC and in-hand, you lose the employer's PF contribution (counted in CTC but not paid to you now), your own PF contribution (saved, not spent), income tax, and sometimes a chunk held back as a yearly bonus. A ₹12 lakh CTC often lands around ₹80,000–90,000 a month in hand, depending on your tax and PF.
How to compare two offers fairly
- Don't compare CTC to CTC blindly, one may pack in more "benefits" that you never see as cash.
- Ask for the expected in-hand monthly figure, or estimate it.
- Factor in the real cost of each job: commute, hours, and whether perks are things you'd actually use.
Try it: the Salary Calculator converts any figure between yearly, monthly and hourly so you can line up offers on the same basis. For the tax side, the Percentage Calculator helps work out deductions.