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Calculate your Take-Home salary in a click! Know the detailed salary breakup of your CTC
In-hand salary calculator helps to calculate in hand payout of the employees in an organization.
CTC which means Cost To Company is a term used to define the payout of an employee or the compensation packages. It refers to the total cost that a company incurs for an employee, including the employee’s salary and other bonuses and benefits.
Cost To Company represents the overall cost to the company and may not directly portray the take-home salary an employee receives in their banks. The actual take-home salary is calculated by deducting several taxes and statutory compliances from the CTC.
The components of CTC can vary depending on the company’s policies and contract. Generally, the CTC in an In-hand salary calculator includes:
1. Basic pay
2. Allowances
3. Incentives and Bonuses
4. Employee Benefits
5. Retirement Benefit
6. Perquisites
Going toward take-home salary, also called net salary or in-sand salary, refers to the amount of money an employee receives after all the taxes, contributions, deductions, etc., have been subtracted from their gross salary or CTC.Â
To calculate the take-home pay, the following deductions are typically considered in a in-hand salary calculator:
1. Income Tax
2. Employee Provident Fund (EPF) Contribution
3. Professional Tax
4. Other Deductions
After deducting the above mentioned amounts, the remaining balance is an employee’s take home salary or salary in hand. It’s important to keep in mind that take home salary can vary based on individual circumstances and tax laws in different regions. It represents the actual amount that an employee takes home and can utilize for personal expenses.
To know about the compliance deductions, you can visit – Updated Statutory Compliance Checklist in 2023
An in hand salary calculator or take home salary calculator is valuable for both employees and employers. Here are some key reasons why in hand salary calculator is important:
An in hand salary calculator provides transparency to employees by letting them know the breakdown of their total salary. It portrays various deductions, taxes, and contributions and their impact on the in hand salary.
Knowing the exact amount of in hand salary through a salary calculator is crucial for financial planning. Employees can use the in hand salary calculator to assess their monthly budgets, savings, and expenses according to their net salary.Â
When considering a job offer or during salary negotiations, having an In hand salary calculator or in hand salary calculator is beneficial. The salary calculator allows employees to evaluate the impact of various salary offers and how deductions will affect their net salary.Â
Employers need to ensure compliance with tax laws and regulations when calculating employees’ take home salaries through salary calculator. Implementing a robust salary calculator ensures accurate calculations, considering factors such as income tax brackets, statutory contributions, and deductions.Â
 Employees with proper understanding of their in hand salary are much more satisfied at their jobs and are much more engaged, motivated and retained.
For employers, an in hand salary calculator or in hand salary calculator helps by analyzing the overall cost of employing a person. The actual expenses incurred by a company beyond the CTC, such as taxes, statutory contributions, and other deductions can be measured through a salary calculator too.
In conclusion, a take home salary calculator or in hand salary calculator is a valuable tool that promotes transparency, facilitates financial planning, aids negotiations, ensures compliance, enhances employee satisfaction, and assists employers in cost analysis.
Take-Home Salary is an employee’s total salary after all necessary allowances are accounted for, and the deductions are withdrawn.
The formula for the same, being used in our calculator is;
Take-home salary = gross salary - [12% pf contribution(Employee) + LWF(Employee) + ESIC (If Applicable)]
You must be familiar with the components of your salary, and its calculations are explained below.Â
Starting with the basic salary or base pay, is the remuneration an employee earns before any additions or deductions are made to it. The formula to calculate basic salary isÂ
Basic Salary = 50% of the Cost to Company (CTC)
The next component in our calculator is HRA – House Rent Allowance, a general allowance calculated by us. Allowances differ from company to company. The formula for calculating HRA would be;
HRA = 40% of the Basic Salary
Moving ahead, the next component in calculating our take-home salary is the LWF – Labour Welfare Fund. To impart social security to workers, the government introduced the Labour Welfare Fund Act. The act is exercised only in 16 out of the 36 states and union territories in India. LWF does not apply to all categories of employees working in an organization.
LWF;
– Haryana = ₹50 by the employers and ₹25 by the employees, Total = ₹75
– Delhi = ₹2.25 by the employers and ₹0.75 by the employees, Total = ₹3
– Karnataka = ₹40 by the employers and ₹20 by the employees, Total = ₹60
The next component in our in hand salary calculator is Gross Salary. Gross Salary is the amount of remuneration after adding up all the allowances or bonuses but before deducting any of the tax. The formula for the same is;
Gross Salary = Basic Salary + HRA + Allowances/Bonuses
After the Gross Salary is computed, we’ll move toward the calculations for PF or EPF. It’s a government-acknowledged savings scheme for employees. The PF interest rates are established every year by the EPFO (Employees Provident Fund Organization). The formula to calculate EPF is;
PF contribution made from employee & employers end = 12% of basic salary (if basic salary is less than ₹15000)
Salary greater than ₹15000 would have a fixed deduction amount that is = ₹1800.
The next component is ESIC – Employee State Insurance Corporation. The scheme provides employees financial protection in case of any unavoidable health-related eventuality. The said scheme offers medical benefits, unemployment allowance, maternity benefits, disability benefits, etc. Employees’ State Insurance Scheme is calculated on the Gross salary;
ESIC = Employees with a salary of ₹21000 or less than ₹21000 are accountable for paying the ESIC amount.
3.25% of CTC is the employer’s contribution and 0.75% of CTC from the employee.
All the components of the in-hand salary calculator are explained. Now you can enter your salary details and calculate your salary in-hand within seconds.
For employee salary breakup format and structure, you can visit – Guide to Salary Slip Format in India
To calculate employee gratuity amount, you can visit- Gratuity Calculator
In hand/ take Home salary= Gross Salary- Income Tax- Professional Tax
CTC(Cost to company) refers to the total amount that a company has to spend on an employee. CTC and in hand salary are two different things.
The major components of an employee’s salary are Basic salary, HRA, LTA, bonus, perks etc.
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