Salary refers to the regular payments made by an employer to an employee in exchange for their work. These details, including salary components, are outlined in the employee's employment contract.

A salary calculator is a simple tool that helps you calculate your take-home annual and monthly salary, total deductions, and other important salary details.

To use the calculator, an employee needs to input their Cost to Company (CTC), bonus, monthly professional tax, employer's PF contribution, employee's PF contribution, and any additional monthly deductions. The calculator will then provide the net result.

• Basic Salary: Basic salary typically makes up 40-50% of an employee's total salary. It is determined by factors like experience, skills, and qualifications and is a fixed component of the 'Cost To Company' (CTC) package.
• House Rent Allowance (HRA): HRA is offered to employees living in rented accommodation. It is partially or fully exempt from taxes under Section 10(13A) of the Income Tax Act 1961, but is fully taxable if the employee doesn't live in a rented house.
• Leave Travel Allowance (LTA): LTA is an allowance provided to employees for travel expenses. Employees must submit travel proof to claim LTA.
• Professional Tax: Professional tax is levied by the state on employment. The maximum tax charged in a financial year is Rs. 2,500.
• Special Allowance: This is an additional allowance given to employees, which is fully taxable.
• Bonus: A performance-based incentive given by the employer, also referred to as a bonus.
• Employee Contribution to the Provident Fund: Both the employer and employee contribute 12% of the employee's basic salary to the Employee Provident Fund (EPF) every month. The employee's contribution is eligible for tax deductions under Section 80C.

To calculate the take-home salary, an individual needs to enter details like CTC, bonus, professional tax, PF contributions, and any deductions.

Let’s take an example:

Suppose your Cost To Company (CTC) is Rs. 5 lakh and you receive a bonus of Rs. 50,000 for the year. Your total gross salary becomes Rs. 5,00,000 – Rs. 50,000 = Rs. 4,50,000 (Note that the bonus is deducted from the CTC).

Gross Salary = Rs. 5,00,000 – Rs. 50,000 = Rs. 4,50,000

• The gross salary will be reduced by a professional tax of Rs. 2,400 for the year (example).
• The Employee Provident Fund (EPF) contributions by both the employee and employer are deducted as well.
• EPF contributions are calculated based on a maximum salary of Rs. 15,000 per month. This means a 12% contribution, which equals Rs. 1,800 per month or Rs. 21,600 annually.
• The total annual EPF contribution (employee + employer) is Rs. 21,600 each, with 8.33% of the employer’s contribution going to the employee pension scheme.
• Assume the employee also has an additional insurance deduction of Rs. 2,000 annually.

Total Deductions = Professional Tax + EPF (Employee Contribution) + EPF (Employer Contribution) + Employee Insurance

Total Deductions = Rs. 2,400 + Rs. 21,600 + Rs. 21,600 + Rs. 2,000 = Rs. 47,600.

Take Home Salary = Gross Pay – Total Deductions

Take Home Salary = Rs. 4,50,000 – Rs. 47,600 = Rs. 4,02,400

• Quick Results

Sensex India’s salary calculator provides quick results, calculating your take-home salary within seconds.

• Identifies Changes

The calculator helps you understand how changes in your salary, such as receiving a bonus or new deductions, impact your take-home pay.

• Clear Bifurcation

The salary calculator clearly outlines the various components of your salary, showing amounts and deductions in a precise manner.

• Availing an Estimation

Sensex India’s CTC calculator helps estimate both monthly and annual deductions, along with employee and employer contributions to the EPF.