Salary Hike Impact Calculator
Got a hike? See what it really means for your in-hand salary. Check for marginal tax slab jumps, tax increases, and the real percentage increase vs the nominal CTC percentage.
Before vs After Breakdown
| Component | Current | After Hike | Difference |
|---|---|---|---|
| CTC | ₹15,00,000 | ₹18,00,000 | +₹3,00,000 |
| Gross Salary | ₹13,25,000 | ₹15,50,000 | +₹2,25,000 |
| Employee PF | −₹21,600 | −₹21,600 | −₹0 |
| Professional Tax | −₹2,400 | −₹2,400 | — |
| Income Tax | −₹70,200 | −₹1,05,300 | −₹35,100 |
| Annual In-Hand | ₹12,30,800 | ₹14,20,700 | +₹1,89,900 |
| Monthly In-Hand | ₹1,02,566.67 | ₹1,18,391.67 | +₹15,825.00 |
Why your real hike is smaller than your CTC hike
A 20% CTC hike does not mean a 20% in-hand hike. Three things eat into it:
- Higher PF deduction: As basic salary rises, PF deduction rises (up to the wage ceiling).
- Higher income tax: More salary means more tax, especially if you cross into a higher slab.
- Professional tax: Usually flat, but some states have slabs that may trigger.
In your case, a 20% CTC hike translates to a 15.4%% in-hand hike. The gap is 4.6% percentage points: that's the "tax drag" of the hike.
Understanding the tax drag on your hike
A 20% CTC hike sounds great. But the number that matters is your in-hand hike: what actually lands in your bank account. That number is always smaller, and sometimes much smaller.
The three leakages
- PF deduction: Rises with basic salary (up to ceiling)
- Income tax: Progressive slabs mean higher % on incremental income
- Slab jump: Crossing a threshold triggers a higher marginal rate
The slab jump trap
India's tax slabs are progressive. If your hike pushes you from the 20% slab to the 30% slab, every additional rupee above the threshold is taxed at 30%, not 20%. This is why high earners see the biggest gap between CTC hike % and in-hand hike %.
When to re-evaluate your tax regime
After a significant hike, your old-regime deductions may no longer justify staying in the old regime. The new regime has lower slab rates but no deductions. Use this calculator to check both regimes under your new salary and pick the one that maximizes in-hand.
Disclaimer: This calculator uses FY 2026-27 income tax slabs and standard deduction rules. Professional tax rates are approximate. HRA exemption, 80C, 80D, and other deductions are not individually modelled: enter your total expected deductions under the old regime. For exact tax liability, consult a chartered accountant.
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