Have you ever considered calculating your salary in the simplest way possible? It may be difficult to estimate the wages after the company’s deductions and allowances such as House Rent Allowance, Leave Travel Allowance, Special Allowance, Bonus, Employee Contribution to Provident Fund, Professional Tax? As a result, a salary calculator makes things easier and simpler.
Understanding Salary Calculator
A salary calculator is a tool that computes salaries. The salary calculator has the formula to enter the Cost to Company (CTC), bonus, and other information. The salary calculator will display your deductions, such as contributions to the employee provident fund, employee provident insurance, and professional tax, as well as calculate your take-home pay.
How to use the Salary Calculator?
To use the take-home salary calculator India, follow the steps given below.
- You must enter the company’s or CTC’s annual cost.
- Enter the CTC bonus as a percentage or dollar amount.
- The Salary Calculator will show you your total gross pay as well as your performance bonus.
- It will also display the professional tax, the employer provident fund, the employee provident fund, the employee insurance, and the take-home pay.
The Distinction: Primary, Gross, Net salary & CTC
So, to understand the take-home salary calculator India and how it works, we must first understand the basic salary, gross salary, differences between primary and gross salary, the cost to the company, and net salary.
- The basic salary is the fixed or specific amount paid to employees for their work. The basic wage is calculated before any overtime, allowances, or bonuses are deducted or increased. In contrast to the other aspects of Cost to Company, the basic salary remains constant. The total of the basic salary must be included in the in-hand compensation.
- When it comes to gross salary, it is the amount of money an employee earns in a year working for the company. It is the amount minus any deductions such as income tax, professional funds, medical insurance, etc. It does, however, include bonuses, holiday pay, and overtime pay.
- The net salary, also known as the take-home salary, is paid to the employee after deductions such as taxes, provident funds, and others are made. (Net salary = Gross salary – public provident fund – professional tax.)
- Now, Cost to Company (CTC) is the amount a company spends directly or indirectly on hiring and retaining employees. In other words, the total salary package provided to the employee is the cost to the company. It represents the total amount an employer spends on an employee over a year.
In hand Salary
The term ‘in hand’ is commonly used to indicate the net amount after all deductions.
In-Hand salary = Monthly Gross Income – Income tax – Employee PF – Other deductions
The salary calculator assists the employee in understanding his salary breakdown, and he can also seek assistance from the human resources department if he has any questions about his salary. It also informs the employee about his position in the company and assists him in determining whether he is being underpaid. Visit this website to know about TDS rate chart.