How to calculate your salary hike
- Enter your current annual CTC.
- Enter the hike as a percent, or switch to New CTC and type the figure in your appraisal or offer letter.
- Choose your tax regime and the share of CTC that is basic salary.
- Set an inflation rate to see the real hike.
- Read the rise in monthly in-hand pay, the extra tax and the table of 10% to 50% hikes.
Why in-hand pay rises less than CTC
Your current salary is spread across the tax slabs, but every rupee of a raise lands in your highest slab. In the new regime, salary up to ₹12.75 L is tax-free after the ₹75,000 standard deduction and the rebate on taxable income up to ₹12 L. A raise that crosses that line brings tax on the whole income, not just the raise.
On a ₹12 lakh CTC with a 30% hike, the CTC rises 30% but yearly take-home rises 23.3%: income tax goes from ₹0 to ₹95,391. On a ₹6 lakh CTC, which stays below the line, the same 30% hike raises take-home by 34.4%.
| ₹12 lakh CTC, 30% hike | Now | After hike |
|---|---|---|
| CTC | ₹12,00,000 | ₹15,60,000 |
| Gross salary | ₹11,35,140 | ₹14,86,482 |
| Income tax a year | ₹0 | ₹95,391 |
| Monthly in-hand | ₹91,387 | ₹1,12,716 |
| In-hand hike | 23.3% | |
| Real hike at 5% inflation | 17.5% |
Common hikes on 6, 10, 15, 20 and 30 LPA
Rise in monthly in-hand pay, with the in-hand hike in brackets. New regime, basic at 50% of CTC, PF on the ₹25,000 ceiling, gratuity in the CTC, ₹2,500 professional tax, no bonus.
| CTC | In-hand now | 10% hike | 20% hike | 30% hike |
|---|---|---|---|---|
| ₹6 L | ₹42,589 | +₹4,880 (11.5%) | +₹9,760 (22.9%) | +₹14,639 (34.4%) |
| ₹10 L | ₹75,121 | +₹8,133 (10.8%) | +₹16,266 (21.7%) | +₹24,399 (32.5%) |
| ₹15 L | ₹1,08,597 | +₹10,296 (9.5%) | +₹20,394 (18.8%) | +₹30,056 (27.7%) |
| ₹20 L | ₹1,41,874 | +₹12,726 (9%) | +₹24,763 (17.5%) | +₹36,685 (25.9%) |
| ₹30 L | ₹2,00,941 | +₹16,786 (8.4%) | +₹33,573 (16.7%) | +₹50,359 (25.1%) |
How to work out a hike percent from two CTCs
Hike % = (new CTC − current CTC) ÷ current CTC × 100
- ₹12 L to ₹15 L: (₹15,00,000 − ₹12,00,000) ÷ ₹12,00,000 × 100 = 25%.
- New CTC from a hike: current CTC × (1 + hike ÷ 100). A 30% hike on ₹12 lakh is ₹15,60,000.
- Compare like with like: if one CTC includes a bonus or a one-time payment and the other does not, take it out of both first.
- The in-hand hike uses the same formula on yearly take-home, which this calculator works out after PF, professional tax and income tax.
Switching jobs? Put both offers side by side on the job offer comparison calculator, or see the full salary breakup on the salary calculator.
Frequently asked questions
How do I calculate my salary hike percentage?
Subtract your current CTC from the new CTC, divide by the current CTC and multiply by 100. A move from ₹12 L to ₹15 L is (₹15,00,000 − ₹12,00,000) ÷ ₹12,00,000 × 100 = 25%. To go the other way, new CTC = current CTC × (1 + hike ÷ 100).
What is a 30% hike on 12 LPA?
A 30% hike on ₹12 lakh takes your CTC to ₹15.6 L. In the new regime, with basic at 50% of CTC, monthly in-hand pay rises from ₹91,387 to ₹1,12,716, an increase of ₹21,329 or 23.3%. Income tax goes up by ₹95,391 a year.
Why is my in-hand hike lower than my CTC hike?
Each extra rupee is taxed at your highest slab, while your current pay is spread over lower slabs, so tax rises faster than pay. In the new regime, a hike that takes your salary past the rebate line also brings tax on income that was tax-free before. PF and gratuity grow with basic and take a further share.
Can a salary hike reduce my in-hand salary?
Only in narrow bands. Just above ₹12.75 L of salary in the new regime, marginal relief limits tax to the income above ₹12 L, but 4% cess is added on top. On these figures, a CTC raise from ₹13.5 L to ₹14.1 L changes monthly in-hand from ₹1,03,020 to ₹1,02,825. A somewhat larger raise takes you past the band, and in-hand pay rises again.
What is the real hike after inflation?
It is your in-hand hike adjusted for rising prices: (1 + in-hand hike) ÷ (1 + inflation) − 1. A 23.3% in-hand rise with 5% inflation is a real hike of 17.5%. A 5% CTC hike in a year with 5% inflation is close to 0% in real terms, before tax.
Does my PF go up with a hike?
If your employer pays PF on the ₹25,000 a month wage ceiling and your basic is already above it, your PF stays at ₹3,000 a month and all of the raise reaches your pay before tax. If PF is on your full basic, 12% of the rise in basic goes to PF, which lowers the in-hand increase but adds to your savings.