Estimate net take-home pay from gross salary and deduction percentage.
Payroll runs from a gross figure down to net pay through two different kinds of subtraction, and confusing them is the usual source of payslip questions. Statutory deductions are required by law — provident fund, professional tax where applicable, and income tax withheld at source. Voluntary deductions are things you opted into: additional PF, insurance premiums, loan repayments, canteen or transport recoveries. Only the first group is unavoidable.
The part that surprises people is the employer side. Employer contributions to provident fund, gratuity provision and insurance are a real cost of employing you and usually appear in your CTC, but they never appear in gross pay and never reach your bank account. That is the entire reason CTC exceeds gross pay, which in turn exceeds net pay. When comparing offers, the only number that is directly comparable across employers is net pay, because CTC composition varies enormously — two identical CTCs can produce quite different take-home depending on how much is routed through employer contributions and reimbursements.
CTC includes employer contributions such as provident fund and gratuity provision, which never enter your gross pay. Gross pay is then reduced by statutory and voluntary deductions. Each step lowers the figure, so the gap between CTC and net is often substantial.
Statutory deductions are required by law, such as provident fund, professional tax and tax withheld at source. Voluntary deductions are ones you chose, such as extra PF, insurance or loan repayments, and can usually be changed.
Yes, and often noticeably. CTC composition varies: a package weighted towards employer contributions and reimbursements produces lower take-home than one weighted towards direct salary, even at an identical headline CTC.
Employers project your annual liability and spread it across the year. A change in declared investments, a salary revision or a correction to earlier months causes the projection to be recalculated, and the remaining months absorb the difference.