Difference Between CTC and Inhand Salary: What is the difference between CTC and in-hand salary, understand the whole game

Before joining a job, you should understand all the components of your salary properly. Correct information about basic salary, monthly CTC, and in-hand salary is important for your financial planning. 

Whenever you join a new job, the HR department informs you about the salary. Where two words play a very important role - CTC (Cost to Company) and in-hand salary. Many people are quite confused about what their exact meaning is and how it affects your salary. Let us know the difference between these two.

What is CTC?

CTC means an estimate of the total expenditure incurred by the company on its employee. Apart from your basic salary, it includes various allowances, Provident Fund, gratuity, and other facilities. It is an estimate of your total annual earnings, which is often also called "annual package". The amount of CTC looks more than your total salary because it includes all types of expenses that the company makes for you.

What is in-hand salary?

In-hand salary is the amount that is deposited in your account every month after tax, PF and other deductions. We also call it net salary. This is your real monthly income, which you can use. Let us tell you that the main difference between CTC and in-hand salary is due to these deductions.

Why is it important to have a correct understanding of salary?

Many times people get more curious after seeing the CTC, but they do not have the correct information about the in-hand salary. Therefore, before joining a new job, you should understand all the parts of your salary properly. Correct information about basic salary, monthly CTC, and in-hand salary is important for your financial planning.