Understanding your salary slip: CTC vs gross vs net

An offer letter says ₹12 lakh. Your salary slip shows a smaller gross figure. Your bank balance shows something smaller still. None of these numbers is wrong — they're just answering different questions.

CTC: what you cost the company

Cost to Company includes everything your employer spends on you in a year — your salary, yes, but also their contribution to your Provident Fund, sometimes insurance premiums, and other benefits. It's a budgeting number for HR, not a promise about what you'll see in your account.

Gross salary: CTC minus the employer's share

Strip out the employer's PF contribution (and any other employer-side benefit that never touches your salary account) and you get your gross salary — the figure that's actually yours before tax and your own deductions. This is usually 8-12% lower than CTC, mostly because of that PF contribution.

Net / take-home: gross minus your own deductions

From gross salary, subtract your own PF contribution and income tax, and what's left is your net or take-home pay — the number that actually lands in your bank account every month. This is the only one of the three that tells you what you can spend.

Why the gap between CTC and take-home varies so much

Two people with an identical CTC can end up with meaningfully different take-home pay, depending on their salary structure (how much is Basic vs allowances), which tax regime they're on, how much rent they pay, and how much they invest under Section 80C. That's the whole reason a CTC number alone doesn't tell you much — it's the starting point for a calculation, not the answer.

Want your actual number? The CTC → in-hand calculator runs your CTC through PF, HRA, and both tax regimes to show exactly what you'd take home.