Your take-home salary can be measured by a simulation called the salary calculator. It is the total salary that an employee receives after some necessary removals. It includes a formula box to enter Cost to Company (CTC) and bonuses included in CTC. Salary calculators include deductions such as employer and employee insurance, employee provident funds, take-home pay, and professional tax.
How does a salary calculator work?
When calculating the take-home pay, you must enter the Cost to Company (CTC) and the bonus, if any, as an amount or a percentage of the CTC. Suppose your Cost to Company (CTC) is Rs.12 lakh. The employer has decided to grant you a bonus of Rs.60,000 for the year.
Your total gross salary is Rs.12,00,000 – Rs.60,000 = Rs 11,40,000. (The bonus received is subtracted from the Cost to Company). The professional taxes in the State of Karnataka are Rs 2,400 a year. Next, deduct the employer and yourself (the employee) contributions for the Employee Provident Fund (EPF).
Based on a maximum salary limit of Rs 15,000 a month, you must calculate the employee’s EPF contribution at 12% or Rs 1,800 per month or Rs 21,600 per year. So, the employee now has a yearly contribution of Rs.21,600 towards the Employee Provident Fund (EPF). Similarly, the employer contributes a similar amount of Rs 21,600 to the EPF.
The total sum of deductions = EPF (contribution by the employer) + EPF (contribution by the employee) + Tax calculated based on your salary.
The income tax department deducts a certain percentage from the employee’s salary, called TDS (Tax Deducted at source). A tds rate chart is released every year, showing the sections from which a percentage will be deducted. It is also segregated based on residents and non-residents. If you wish to understand your in-hand salary, you can check out the take home salary calculator India.
Benefits of a salary calculator
There are many benefits when it comes to using a salary calculator. It will calculate the final take-home salary within seconds. You’ll learn the new benefits under a new compensation package, and you’ll get an idea of how your salary structure will change if you receive a bonus.
With the Salary Calculator, you can view the different components of your salary. Your contribution towards the employee provident fund and the employer’s contribution will be shown.
Conclusion
In the Salary Calculator, the take-home salary is calculated by considering whether or not the bonus is a fixed amount or a percentage of the base salary. There are many benefits to using the salary calculator as well. It depicts results within seconds. The Salary Calculator is an easy-to-use tool that can be accessed from the comfort of your home to find out your take-home pay in seconds.
