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What will be the monthly in-hand salary if the CTC is 9.5 LPA?

 I have seen many people are just dividing CTC by 12 to get monthly salary. But that is not the correct way. There are some factors about CTC. CTC stands for cost to company. It means whatever cost will beard by company when it's giving you employment.


Most of the MNCs have two component in CTC, I am talking about service based companies who are not giving free shares as bonus to the employee.

how to calculate monthly Salary


One is Variable bonus and other is fixed pay. This two comprises total CTC.


Some small companies do not have any variable bonus component and entire CTC comes under fixed pay only.


Let me assume 9.5 Lakhs is fixed pay for you. Generally I have seen 30000 as basic salary per month when your fixed component is around 9.5 lakhs.


PF deductions are made as 12% of basic salary. So 3600 will be monthly PF deduction for you.


Yearly it will be 3600x12= 43200


So now your annual salary after PF deduction will be 906800.


Now company will deduct gratuity also. It will be 4.81% of basic salary. Monthly it will come as 1443 and yearly it will be 17316.


Now your earning after these two deductions is 906800–17316= 889484 lakhs per year.


Now divide it by 12, you will get 74124 per month.


Without tax deduction your net earning will be 74124 per month.


Suppose you are able to save entire 80C, then Taxbale salary will be 889484–106800= 782684


106800 is the rest amount under 80C. Total allowed amount is 1.5 lakhs and PF deduction comes under this 1.5 lakhs. So we have to minus PF amount and rest amount will be declared as 80C.


Still taxable amount is 782684. Now as per tax slab amount over 500000 to 750000 will be taxed as per 10%.


Your taxable income is 282684. So 10% of this is 28269.

Monthly tax 28269/12= 2356


Monthly will be 2356. So monthly earning will be 74124–2356= 71768 per month.

Tax deduction may not be accurate as it varies with organizations. There can be standard deductions, Cess.

Congratulations for such handsome salary 😀.


If there are variable bonus then you can do same calculation on fixed component.

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