How to Calculate Monthly Salary from LPA (2026 Guide)

How do you calculate monthly salary from LPA?

There are two numbers to calculate — the monthly CTC and the monthly in-hand salary — and they need different steps:

1. Monthly CTC: multiply the LPA figure by 1,00,000 and divide by 12. Formula: monthly CTC = LPA × 1,00,000 ÷ 12.
2. Gross monthly salary: subtract the employer's provident fund (12% of basic pay) and gratuity (4.81% of basic pay) from the CTC, then divide by 12. These two sit inside the CTC but are never paid to you monthly.
3. Monthly in-hand salary: from the gross monthly salary, subtract your own provident fund (12% of basic pay), professional tax (about ₹200 a month, varies by state) and income tax (TDS) if any applies. What is left is the take-home pay that reaches your bank account.

The table below applies that method to the most common packages, using one consistent salary structure throughout this guide: basic pay at 50% of CTC, provident fund at 12% of basic pay on both sides, gratuity at 4.81% of basic pay, professional tax of ₹200 a month, and income tax under the new tax regime for FY 2025-26. Your own payslip may differ slightly if your basic pay is a different share of CTC or your employer caps provident fund — both variations are covered below. The full CTC to in-hand calculation is shown in the worked example below.

As a rough rule of thumb, monthly in-hand salary is about 85% of the monthly CTC up to 12 LPA, and a little less above it once income tax starts. For any package not in the table, the free monthly salary calculator converts between annual and monthly figures instantly.

Worked example: 4.3 LPA means how much per month?

Take a 4.3 LPA offer — a typical fresher or early-career package — and work it through step by step:

1. Annual CTC: 4.3 × ₹1,00,000 = ₹4,30,000 a year.
2. Monthly CTC: ₹4,30,000 ÷ 12 = ₹35,833 a month. This is the headline number — not your pay.
3. Basic pay: 50% of CTC = ₹2,15,000 a year, or ₹17,917 a month.
4. Employer's provident fund (employer PF): 12% of basic pay = ₹25,800 a year, or ₹2,150 a month. This stays inside the CTC.
5. Gratuity: 4.81% of basic pay = ₹10,342 a year, or ₹862 a month. Also inside the CTC, and only paid out after five years of service.
6. Gross monthly salary: (₹4,30,000 − ₹25,800 − ₹10,342) ÷ 12 = ₹32,822 a month.
7. Income tax: taxable income is ₹4,30,000 − ₹75,000 standard deduction = ₹3,55,000, which falls inside the nil slab — ₹0 tax.
8. Deductions: your own provident fund ₹2,150 + professional tax ₹200 = ₹2,350 a month.
9. In-hand salary: ₹32,822 − ₹2,350 = ₹30,472 a month.

So 4.3 LPA means ₹35,833 a month on paper and about ₹30,472 a month in your bank account — roughly 85% of the headline figure. The ₹5,361 monthly gap is not lost money: ₹4,300 of it a month goes into your provident fund account (₹2,150 from you and ₹2,150 from your employer) and earns interest, and ₹862 a month is gratuity that becomes payable after five years with the same employer.

What is the difference between CTC, gross salary and in-hand salary?

The three figures describe the same job at three different stages, and mixing them up is the most common mistake when reading an Indian offer letter:

Two things in the CTC never reach your monthly pay but are still yours: the employer's provident fund contribution goes into your EPF account alongside your own, and gratuity accrues as a lump sum payable when you leave after five years. Variable pay is the other trap — if part of the LPA is a performance bonus, it is counted in the CTC but only paid if the targets are met, so your fixed monthly in-hand pay is lower than the table suggests. Always ask what share of the package is fixed and what share is variable before comparing two offers. Our payroll calculator guide shows how the same gross-to-net logic works on a payslip in other countries.

How is basic pay calculated from CTC?

Basic pay is the foundation of the whole salary structure: provident fund, gratuity and HRA are all calculated as percentages of it. In most Indian offer letters basic pay is 40–50% of CTC — this guide uses 50% in every worked example. The rest of the CTC is split into allowances: house rent allowance (HRA) is typically 40% of basic pay in non-metro cities and 50% in metro cities, and special allowance is the balancing figure that makes the components add up to the CTC. So for a 4.3 LPA package with basic pay of ₹17,917 a month, HRA would be about ₹7,167 a month in a non-metro city (40% of basic) or ₹8,958 in a metro (50% of basic), and the remainder is special allowance and other fixed allowances. If your offer letter shows basic pay below 40% of CTC, check the structure carefully: a low basic pay means lower provident fund and gratuity, which shrinks your retirement savings even though the monthly in-hand pay looks slightly higher.

How much income tax do you pay on your LPA salary?

Under the new tax regime — the default for FY 2025-26 (assessment year 2026-27) — income tax is charged on the slabs below, with a 4% health and education cess added to the tax. Salaried employees get a standard deduction of ₹75,000, and the Section 87A rebate of up to ₹60,000 wipes out the entire tax bill where taxable income is ₹12 lakh or less. The practical result: a salary of up to ₹12.75 lakh a year pays zero income tax. Verify the current slabs on the official Income Tax Department portal, incometax.gov.in, before filing — rates change with each Budget.

Worked example at 12 LPA: taxable income is ₹12,00,000 − ₹75,000 = ₹11,25,000, which is under the ₹12 lakh rebate limit, so the Section 87A rebate cancels the whole tax bill — ₹0 income tax, and the in-hand salary is ₹85,395 a month. Worked example at 15 LPA: taxable income is ₹15,00,000 − ₹75,000 = ₹14,25,000. The slab tax is 5% on ₹4,00,000 (₹20,000) + 10% on ₹4,00,000 (₹40,000) + 15% on ₹2,25,000 (₹33,750) = ₹93,750, plus 4% cess of ₹3,750, giving ₹97,500 a year, or ₹8,125 a month deducted as TDS — and the in-hand salary is ₹98,669 a month. The rebate stops applying the moment taxable income crosses ₹12 lakh, so the tax bill jumps quickly above 12.75 LPA. For the reverse calculation — working out the gross from a target take-home figure — see our gross-from-net guide.

What else comes off your monthly pay?

Three deductions sit between gross salary and in-hand salary, and each has its own rule:

• Provident fund (EPF). You contribute 12% of basic pay and your employer contributes another 12% on top — 8.33% of the employer's share goes to the pension scheme (EPS) and 3.67% to your EPF account. The statutory wage ceiling is ₹15,000 a month, so where the employer applies the ceiling the contribution is capped at ₹1,800 a month each side; many companies deduct on the full basic pay instead, which lowers your in-hand pay but builds a bigger retirement balance.
• Professional tax. A state levy, not a central one: Maharashtra charges ₹300 a month (capped at ₹2,500 a year), Karnataka ₹200 a month, and some states charge nothing at all. The examples in this guide use ₹200 a month.
• Income tax (TDS). Your employer deducts it monthly from your pay and deposits it with the government. Below 12.75 LPA salary it is zero under the new regime, as shown above; above that level it is the figure that moves the most between packages, so it is worth checking separately for every offer.

Run any package through the free salary calculator India page to check the annual figure before you accept an offer — it applies the published rates for 15 countries, including India.

How do you convert monthly salary back to LPA?

The reverse question comes up when a job quotes a monthly figure and you want the LPA to compare it with other offers. If the monthly figure is CTC, the conversion is exact: LPA = monthly CTC × 12 ÷ 1,00,000. So ₹35,833 a month CTC is 4.3 LPA, and ₹1,00,000 a month CTC is 12 LPA. The same method answers how to calculate an annual salary from a monthly figure: multiply the monthly CTC by 12 to get the annual salary, then divide by 1,00,000 for the LPA. If the monthly figure is your in-hand salary, the conversion is approximate, because in-hand pay is only about 85% of CTC: divide the monthly in-hand figure by 0.85, multiply by 12 and divide by 1,00,000. As a check, ₹30,000 a month in hand works out to about 4.2 LPA, ₹35,000 to about 4.9 LPA, ₹40,000 to about 5.6 LPA and ₹45,000 to about 6.3 LPA — and ₹85,000 a month in hand is roughly a 12 LPA package. The exact answer depends on your basic pay share and whether your employer caps provident fund, so treat the reverse figure as an estimate and confirm it against the offer letter. Our overtime pay guide covers the other way monthly pay can move — extra hours on top of the fixed package.

Five common mistakes when you calculate monthly salary from LPA

• Treating LPA ÷ 12 as your monthly pay. That gives the monthly CTC, not the in-hand salary. At 4.3 LPA the difference is ₹5,361 a month — budget on the in-hand figure of ₹30,472, not the ₹35,833 headline.
• Forgetting the employer's provident fund and gratuity inside the CTC. Both are part of the package but neither is paid monthly. Together they take about 8.9% off the CTC before your gross salary is even worked out.
• Assuming income tax applies at every level. Under the new regime a salary up to ₹12.75 lakh a year pays zero income tax thanks to the ₹75,000 standard deduction and the Section 87A rebate. Tax only starts above that line.
• Comparing a CTC figure with an in-hand figure. Two offers can only be compared on the same basis — CTC with CTC, or in-hand with in-hand. A 5 LPA offer with no variable pay can beat a 5.5 LPA offer where a fifth of the package is a bonus you may never see.
• Ignoring the basic pay share. A low basic pay means lower provident fund and gratuity, which shrinks your retirement savings. If basic pay is under 40% of CTC, the offer is weaker than the headline LPA suggests.

How do you check the figure on your first payslip?

When the first payslip arrives, check it against the method in this guide: annual CTC ÷ 12 should equal the monthly CTC on the letter; gross salary should be CTC minus the employer's provident fund and gratuity; and the in-hand figure should be gross salary minus your provident fund, professional tax and TDS. The most common first-payslip surprise is a lower-than-expected in-hand figure because the employer deducts provident fund on the full basic pay rather than the ₹15,000 ceiling — worth ₹1,000 or more a month at higher packages. If any line does not match the offer letter, ask payroll before the second month: the first payslip is the easiest one to correct.