Salary Hike Calculator Tax Year 2026–27
Your appraisal letter says the CTC went up by a certain percentage. This shows what happens to the number that actually reaches your account.
Your result
Estimates only. Your payslip and your employer's records are the authority. Disclaimer
Why a 30% hike is not a 30% bigger payslip
Appraisal letters quote CTC. Your bank account receives take-home. Between the two, three things eat into the increase.
Tax is the largest. Slabs are progressive, so your raise is taxed at your top marginal rate, not your average rate. Someone moving from ₹12 lakh to ₹15 lakh is paying 15% on most of the increase while their overall effective rate is far lower.
Employer-side costs scale too. If your Basic rises with your CTC, so does the employer PF contribution and the gratuity provision inside your package. Part of your raise goes to funding a bigger version of the components you never see.
PF follows Basic. If your employer charges PF on your full Basic rather than the ₹15,000 ceiling, a higher Basic means a bigger deduction. That money is still yours, but it is not spendable this month.
The result is a retention rate, how much of each extra rupee of CTC actually arrives. Below the tax threshold it is close to 100%. In the higher slabs it drops toward two-thirds, and above the surcharge threshold, lower still.
What to do with this when negotiating
Compare offers on take-home, not CTC. Two packages with identical CTC can differ by thousands a month depending on how much is Basic, whether employer PF sits inside the number, and how much is variable pay. When you are weighing a counter-offer, the question is not how much the CTC moved. It is how much the payslip moves.
Common questions
Why did my take-home barely move after a big hike?
Usually because the raise crossed a slab boundary, or because your Basic rose and took your PF deduction with it. The most extreme case is the marginal relief band just above ₹12,00,000 of taxable income, where the effective marginal rate is about 104%, a small raise there can genuinely leave you a little worse off.
How do I compare two offers properly?
Put both through the salary calculator with each offer’s actual structure, Basic percentage, whether employer PF is inside CTC, how much is variable pay, and compare the monthly take-home figures. Comparing CTC alone tells you very little.
Does a hike change my tax regime choice?
It can. The old regime’s deductions are mostly fixed amounts, so their relative value shrinks as income rises, while the new regime’s wider slabs keep helping. Re-run the comparison after any significant raise rather than assuming last year’s choice still holds.
Is variable pay part of my hike?
Only if it is paid. A raise that adds ₹3 lakh of variable pay to your CTC adds nothing to your monthly salary and only pays out if targets are met. Treat fixed and variable increases as separate things when you evaluate an offer.
How we keep this calculator accurate
- Tax rules are the ones in force for Tax Year 2026–27, under the Income-tax Act, 2025 (in force from 1 April 2026).
- EPF and pension figures follow EPFO’s published contribution rules.
- Professional Tax is included only for states where we have a rule we trust, and named as missing where we do not.
- Every assumption behind the estimate is shown on screen and can be changed.
- The calculator runs entirely in your browser. Your salary is never sent anywhere.
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