How to compare two job offers
- Enter each offer's fixed CTC and its basic salary as a share of fixed pay.
- Add variable pay and any one-time joining bonus.
- Mark whether employer PF and gratuity are inside the CTC or paid on top.
- Add an extra monthly cost, such as higher rent, against the offer that brings it.
- Read the monthly in-hand difference, first-year cash and PF and gratuity for both.
Why two offers with the same CTC can differ
- Employer PF and gratuity: inside the CTC, they come out of your gross salary. Paid on top, they do not, so the same CTC gives more in hand.
- Variable pay: it counts in the CTC but is paid once or twice a year, and only in full if targets are met.
- Basic salary: a higher basic raises PF and gratuity. With PF on the ₹25,000 wage ceiling, it mainly raises gratuity; with PF on full basic, it also lowers in-hand pay.
- Joining bonus: it is one-time and taxed at your slab, so it lifts the first year only.
Worked example: two ₹15 L offers
New regime, basic at 50% of fixed pay, PF on the ₹25,000 ceiling, ₹2,500 professional tax. Offer A is all fixed; Offer B has ₹2 L of variable pay, with PF and gratuity paid on top of the CTC.
| Offer A | Offer B | B vs A | |
|---|---|---|---|
| CTC | ₹15,00,000 | ₹15,00,000 | ₹0 |
| Employer PF and gratuity | Inside the CTC | On top of the CTC | |
| Gross salary | ₹14,27,925 | ₹15,00,000 | + ₹72,075 |
| Income tax a year | ₹86,256 | ₹97,500 | + ₹11,244 |
| In-hand a month | ₹1,08,597 | ₹98,083 | − ₹10,514 |
| In-hand a year, with variable after tax | ₹13,03,169 | ₹13,64,000 | + ₹60,831 |
| PF a year (yours + employer's) | ₹72,000 | ₹72,000 | ₹0 |
| Gratuity earned a year | ₹36,075 | ₹31,265 | − ₹4,810 |
Offer A pays ₹10,514 more a month, because Offer B's variable pay is paid separately. Over a year, with variable pay in full, Offer B pays ₹60,831 more, and it adds ₹4,810 less to PF and gratuity.
Things to check beyond the pay
The calculator compares money only. Offer letters also differ on points like these:
- How variable pay is decided and paid, and what share was paid in recent years.
- Repayment clauses on the joining bonus and any relocation support.
- Notice period, probation terms and any bond or service agreement.
- Health insurance cover for you and your family, and whether parents are included.
- Stock options or RSUs: the vesting schedule and how they are taxed.
- Leave policy, leave encashment, working hours and remote or office days.
- Commute time and the cost of living in the job's city.
To see what a raise at your current job adds, use the salary hike calculator. For a full breakup of one CTC, use the salary calculator.
Frequently asked questions
How do I compare two job offers?
Compare what each offer pays in hand each month, what it pays over the year once variable pay and any joining bonus are taxed, and what goes into PF and gratuity. Then subtract any extra cost one job brings, such as higher rent. The CTC alone hides most of these differences.
Why do two offers with the same CTC give different in-hand pay?
Because CTC can include employer PF, gratuity, variable pay and benefits you do not get each month. Two ₹15 L CTCs, one all fixed with PF and gratuity inside and one with ₹2 L variable pay and PF and gratuity on top, give ₹1,08,597 and ₹98,083 a month in hand in the new regime.
Is a joining bonus taxed?
Yes. It is taxed as salary in the year you receive it, at your slab rate. A ₹2 L joining bonus on a ₹15 L CTC leaves about ₹1,68,800 after tax in the new regime. Many offers ask you to repay it if you leave within a set period, so check the clause.
Should I count variable pay when comparing offers?
Count it, but separately. Variable pay depends on company results and your rating, and is often paid once or twice a year. This calculator shows monthly in-hand without it and yearly in-hand with it, assuming it is paid in full, so you can see both.
How do I compare offers in two different cities?
Enter the extra monthly cost of the costlier city, such as the difference in rent, against that offer. On a ₹15 L CTC, ₹10,000 more rent a month takes in-hand pay from ₹1,08,597 to ₹98,597.
Is employer PF part of my in-hand salary?
No. Employer PF goes to your EPF account and you get it with interest when you withdraw. If it is inside the CTC, it reduces your gross salary; if it is paid on top, your in-hand pay is higher for the same CTC. Either way it is long-term savings, not monthly pay.