The ₹18 LPA that quietly became ₹1.1L a month
A couple of years ago I got an offer that said 18 LPA and I did the lazy math in my head: eighteen divided by twelve, so about ₹1.5L landing in my account every month. Nice. The first payslip said something closer to ₹1.1L. Nobody had lied to me. That's just what happens between the number on the offer letter and the number your bank actually shows you. I've watched friends make the same face I…
An Indian software engineer shared their experience of receiving an offer letter stating an annual package of ₹18 lakh, which they initially calculated to be ₹1.5 lakh per month. However, when they received their first payslip, the amount was closer to ₹1.1 lakh. The discrepancy arises from various deductions and contributions made by the employer, which are included in the Cost to Company (CTC) but not reflected as monthly cash in the employee's salary.
The CTC comprises several components that do not directly affect the employee's take-home pay, such as the employer's Provident Fund (PF) contribution, gratuity, and variable pay like annual bonuses. After accounting for these deductions, including EPF contributions, professional tax, income tax (which is deducted every month through TDS), and other factors, the actual monthly take-home salary for a typical CTC of ₹18 lakh falls in the range of ₹1.1 lakh to ₹1.2 lakh, depending on the specific salary structure and tax regime applied.
The engineer also highlights the usefulness of an online salary calculator that can provide a clear breakdown of take-home pay under different tax regimes, making it easier for employees to understand their actual earnings.
Written by urgent.news from Dev.to's reporting — not their text. Machine-written — may contain errors; check the original before relying on it.
