A CTC headline is not a monthly salary. Separate fixed cash and target variable pay from employer-paid items, then estimate income tax using verified new-regime rules and enter PF from your offer or payroll.
Illustrative worked examples
Each row is a hypothetical package calculated by the same model as the interactive tool. They use the new regime and 50% basic pay. PF contribution amounts are entered manually; the ₹20L illustration uses ₹36,000 annual employee PF and ₹36,000 employer PF at target, while the other examples use zero PF inputs. These are examples, not market observations or guaranteed payroll outcomes.
| Illustration | CTC/year | Fixed gross/year | Target variable/year | Income tax/year | Monthly cash at zero variable | Monthly average at full target |
|---|---|---|---|---|---|---|
| ₹8L package · no target bonus | ₹8,00,000 | ₹7,64,000 | ₹0 | ₹0 | ₹63,667 | ₹63,667 |
| ₹12L package · modest target bonus | ₹12,00,000 | ₹10,92,000 | ₹72,000 | ₹0 | ₹91,000 | ₹97,000 |
| ₹20L package · 10% target variable | ₹20,00,000 | ₹17,84,000 | ₹1,80,000 | ₹1,84,912 | ₹1,33,377 | ₹1,45,257 |
| ₹40L package · higher target bonus | ₹40,00,000 | ₹36,04,000 | ₹3,60,000 | ₹7,76,568 | ₹2,44,979 | ₹2,65,619 |
How the estimate works
For AY 2026–27 (income earned in FY 2025–26), the model estimates ordinary salary income for a resident individual under age 60 in the new regime. It applies the standard deduction, rebate and marginal relief, surcharge rules, and 4% cess. Professional tax reduces cash but is entered from payroll or a verified state schedule. Choose manual PF amounts, 12% on the ₹25,000 statutory wage ceiling, or 12% of full basic pay. The employer share is split into 8.33% EPS and the balance to EPF in calculated modes. Employer contributions count toward CTC only when marked included. Gratuity and other costs are not inferred. Target variable pay stays separate from fixed cash.
Limits to the estimate
This is not a payslip or tax filing. It excludes special-rate income, exemptions not entered, other income, employer-specific tax treatment, and monthly payroll timing. State professional tax must be checked against the current official state schedule and personal circumstances. A positive CTC remainder is unallocated; a shortfall means entered employer components exceed the package.
Official references
- Income Tax Department: tax rates for AY 2026–27
- Income Tax Department: Salaried Individuals for AY 2026–27
- Ministry of Labour and Employment: revised ₹25,000 monthly EPFO ceiling and contribution split — effective 17 September 2026
- Employees' Provident Fund Organisation: wage-ceiling FAQ — retrieved 9 October 2026.
Official tax and EPFO sources were checked 9 October 2026. The FAQ describes the ₹25,000 monthly ceiling effective 17 September 2026, contribution examples and rates, and says CTC is not by itself the statutory basis for PF liability. Exact application to offer components and individual membership cases requires qualified payroll review. PF amounts remain manual; state professional tax is entered from an offer or payslip.
Questions worth checking
- Is CTC the same as monthly salary?
- No. This estimate separates fixed cash and target variable pay from employer PF, gratuity, and other costs that you enter from the offer. A positive CTC remainder is shown as unallocated, not treated as salary.
- How does the calculator estimate tax for 2026–27?
- It models ordinary salary for a resident individual under age 60 using the new regime under Section 202 of the Income-tax Act, 2025. It applies the standard deduction, Section 156 rebate and marginal relief, applicable surcharge, and 4% cess. Professional tax reduces cash but is not deducted from taxable income in this estimate. This CTC view uses the new regime; a separate comparison page estimates old-regime tax for salary-only cases.
- How is PF calculated?
- Choose manual payroll amounts, a 12% contribution on the ₹25,000 monthly wage ceiling, or 12% of full basic pay. The employer contribution is split into 8.33% EPS and the remaining EPF share in calculated modes. Confirm membership and the applicable wage basis against official rules and payroll. Employer PF counts toward CTC only when marked as included.
- Does the calculator know my state professional tax?
- No. Select a state or union territory for context, then enter the annual amount from your payslip or offer. The calculator does not infer a state schedule.
- Is target variable pay guaranteed?
- No. The zero-variable result excludes it. The target-variable result is an annual average only if the full target is paid; actual payout depends on your written offer and employer plan.