CTC vs gross vs net salary

Three salary numbers get thrown around in Indian offers, and they mean very different things. Confusing them is the single biggest reason people are surprised by their first payslip.

CTC (Cost to Company)

The total annual cost the company bears for you. It includes your salary plus employer PF, gratuity, and often things like insurance premiums and the variable bonus. It's the biggest, most flattering number — and the one on your offer letter.

Gross salary

CTC minus the employer's own contributions (employer PF, gratuity) and minus the variable component that isn't paid monthly. Gross is your salary before your deductions — basic + allowances (HRA, special allowance, etc.).

Net / in-hand salary

Gross minus your deductions: employee PF, professional tax and income tax. This is your take-home — the amount credited to your account each month.

Quick comparison

• CTC → what the company spends on you.
• Gross → your salary before personal deductions.
• Net / in-hand → what you actually receive.

The gap between CTC and in-hand is normal and mostly goes into your EPF retirement savings and taxes — it isn't lost. See exactly where it goes with the in-hand salary calculator, or read how EPF and gratuity work.