In-Hand Salary Calculator

What is a salary calculator?

A salary calculator is an easy tool designed to help you calculate your in-hand salary. Based on the details provided by your employer you can simply enter the relevant amount into the salary calculator and get to know your in-hand salary.

Let us break down some important components that will assist you to understand your salary

The basic salary is the fixed amount an employee earns before adding or deducting components like bonuses, overtime, investments, or dues. It’s the core pay given for the hours worked.

Typically, the basic salary constitutes 40% to 60% of the CTC (Cost to Company). It’s also used to calculate statutory components like Provident Fund (PF), gratuity, and bonuses. Any change in the basic salary directly impacts the overall CTC of the employee.

Example: If your CTC is ₹5,00,000 per year and your basic salary is 50% of the CTC, your basic salary will be ₹2,50,000 annually or ₹20,833 per month.

Gross salary is the amount that employees receive before any deductions or taxes.

Formula: Gross Salary = Cost to Company (CTC) - Employer's PF Contribution (EPF) - Gratuity

Example: If your basic salary is ₹20,000 per month and you receive ₹5,000 in allowances (HRA, travel, etc.), your gross salary is ₹25,000 per month.

House Rent Allowance (HRA) is a portion of an employee's compensation that is intended to cover expenditures associated with rented housing. It is partially or totally tax deductible under Section 10(13A) of the Income Tax Act of 1961 , providing a major benefit to employees living in rental accommodation.

The amount of HRA varies depending on the employee's city of residence and the cost of living. Employees in metropolitan locations typically receive a greater HRA due to the higher cost of living. However, if an employee does not live in a rented residence, the entire HRA is taxable.

Employers add HRA as part of their wage packages, and it is deducted from taxable income based on certain criteria, such as city of residence.

Conveyance allowance is an expense provided by an employer to the employees who travel from their residences to the workplace. In case there is no office transportation available for the employees by the company then in this case a conveyance allowance or travel allowance is provided.

Special allowance is an additional amount granted to employees to cover various expenses such as clothes, food, academic allowance, internet subscription, phone bills, stationery items, and so on.

The special allowance varies by company and is completely taxable in the hands of employees.

The Employee Provident Fund (EPF) requires both the employer and the employee to contribute 12% of their basic income each month. Such contributions made by the employee are eligible for deduction under Section 80C.

To know more about Employee Provident Fund (EPF) read the following article - What is employees provident fund?

Professional tax (PT) is a direct tax imposed by state governments in India on salaried and self-employed individuals. A person who receives a monthly salary from his company or makes money from his own business, profession, or trade has to pay professional tax.

To know more about Professional Tax (PT) read the following article - What is Professional Tax?

Cost to company (CTC) is the total expense your employer spends on you, including your gross salary, bonuses, and indirect benefits like PF, insurance, and gratuity contributions.

Example: If your gross salary is ₹25,000 per month and the company contributes ₹3,000 to your PF and ₹2,000 to insurance, your monthly CTC is ₹30,000 (or ₹3,60,000 annually).

Conclusion

Understanding your compensation components is important for effective financial planning and income transparency. The Runtime HRMS in-hand salary calculator makes this process easier, providing a clear view of your take-home pay, deductions, and taxable income. Whether you're an employee attempting to control expenses, a job seeker analyzing offers, or an HR expert optimizing payroll, this in-hand salary calculator gives accurate figures that comply with Indian tax rules.

This in-hand salary calculator will help you interpret your wage structure by breaking down major income components such as basic pay, HRA, EPF, and gross salary. Do you want to generate accurate payroll and process timely salaries to your employees? then book a free demo today with Runtime HRMS.