Salary Calculator

Salary is the regular payment made by an employer to his or her employees in exchange for the work performed by them. It is paid at fixed intervals, generally on a monthly basis, and often expressed as an annual sum. Salaries are determined usually by comparing what other employees in similar positions are earning in the same industry and region.

Step 1 - Compute gross income

Step 2 - Add income from all other heads

Step 3 - Deduct loss from house property. The figure derived will be the employee’s total income on which tax is required to be deducted.

Step 4 - Assess the income tax as per the income based on slab rate along with the surcharge and cess as applicable.

Step 5 - Each month, 1/12th of the amount of tax shall be deducted.

Step 6 - Excess or deficit, if any, arising from any earlier deduction can be adjusted by increasing or decreasing the amount of subsequent deductions in the same financial year.

The income tax slab for individuals and HUF (less than 60 years old) for FY 2018-19

The income tax slab for senior citizens (60 years old or more but less than 80 Years old) for FY 2018-19

The income tax slab for senior citizens (80 years old or more) for FY 2018-19

HRA will be 50% of basic salary if the taxpayer is residing in a metro city and 40% of basic salary if the taxpayer is residing in a non-metro city.

Gross salary is the term used to describe all the money an employee has made working for the company. It is the salary which is without any deductions like income tax, PF, medical insurance etc. Gross salary is however, inclusive of bonuses, overtime pay, holiday pay, and other differentials. Some of the components of gross salary include Basic Salary, House rent allowance, Special Allowance and Conveyance Allowance, among others.

Net salary, or more commonly referred to as take-home salary, is the income that an employee actually takes home after tax, provident fund and other such deductions are subtracted from it.

Net Salary = Gross Salary (less) Income Tax (less) Public Provident Fund (less) Professional Tax

Cost to company is the amount that a company spends – directly or indirectly – in hiring and sustaining the service of an employee. In other words, CTC is a term for the total salary package of an employee. It indicates the cumulative amount of expenses an employer spends on an employee during one year.

Gross salary is the amount of salary after totalling all the benefits and allowances but before deducting any tax, while net salary is the amount that an employee takes home. An individual's gross salary is inclusive of benefits such as HRA, conveyance allowance, medical allowance, etc. Net Salary = Gross salary - All deductions like income tax, pension, professional tax, etc. Net salary is also referred to as Take Home Salary.

Basic salary is the figure agreed upon between a company its employee, without factoring in bonus, overtime, or any kind of extra compensation. Gross salary, on the other hand, includes overtime pay and bonuses, but does not consider taxes and other deductions. Say for instance, an employee’s gross salary is Rs. 40,000 and basic salary is Rs. 20,000. This means that the individual will receive Rs. 20,000 as fixed pay and the remaining Rs. 20,000 in allowances such as house rent allowance, conveyance, dearness allowance, etc.