Get To Know Your Annual Pre-tax Salary
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The Salary Calculator helps derive your annual pre-tax salary, taking into consideration the fixed Cost To Company (CTC) offered and variable pay (bonus) with all necessary deductions. Such deductions include Provident Fund (Employer and Employee), Professional Tax, and sometimes Employee Insurance – all standard components of the CTC.
Please note that the salary calculated will be the pre-tax amount. TDS (tax deducted at source), if any, will be deductible separately.
Customise and use it as per your requirements and derive your taxable salary
CTC – The Foundation Of Your Taxable Income
Cost to Company (CTC) is the base to derive taxable income for salaried individuals. It is an annual employee cost incurred/to be incurred by the company which includes –
- Basic salary
- House Rent Allowance (HRA)
- Other Allowances (medical allowance, transport allowance, etc.)
- Variable pay (if any)
CTC – Things To Keep In Mind
- Your CTC is a combination of the direct/monetary benefits, indirect/non-monetary benefits, and employer-employee contribution to PF.
- CTC is never equal to the amount of take-home salary
- CTC has many components that one does not receive as part of take-home salary such as:
Know What Goes Into Your CTC
Basic Salary
The fixed component of an employee’s CTC ranging between 40%-50% of the total. As per the new labour code, the basic salary is to be fixed at 50% of the CTC.
House Rent Allowance (HRA)
Offered to the employees residing in rented accommodation. It is a fixed component – partially or fully exempt from taxes but fully taxable if you don’t live in rented accommodation.
Leave Travel Allowance (LTA)
Allowance received by employees for the expenses incurred while travelling. LTA can be claimed by submitting proof of travel documents to the employer.
Medical Allowence
The Employer disburses a set amount disbursed to the Employee every month irrespective of the actual medical expenses incurred by the latter.
Provident Fund
Employee contribution to Provident Fund comprises 12% of one’s salary. Contributed by both the Employer and Employee; the deductions are reflected in the monthly take home.
Professional Tax
Levied and minthlydeducted by the state in which an employee has been hired, the amount of tax deducted varies statewise.
Note:
- Stock options issued, if any, are not considered as part of CTC
- Various non-monetary benefits are not considered as part of CTC
- Certain portion of the CTC can be allocated as a bonus
For Example:
Say your Cost To Company (CTC) is Rs 12 lakh. The employer gives you a bonus of Rs 2,00,000 for the financial year. Your total gross salary is Rs 12,00,000 – Rs 2,00,000 = Rs 10,00,000. (The bonus is deducted from the CTC).
