Employee money guide

CTC vs Gross vs Net Salary

Understand the difference between CTC, gross salary, and net salary for Indian salaried employees.

Direct Answer

CTC is the total cost a company associates with employing you. Gross salary is earnings before deductions. Net salary is the money credited to your bank account after deductions.

Key Takeaways

CTC is not take-home salary.
Gross salary comes before deductions.
Net salary is what you can actually budget from.

Why CTC looks higher

CTC can include employer PF, gratuity, insurance, bonuses, and benefits that may not be paid monthly as cash.

What to budget from

Use net salary for monthly budgeting because it reflects actual cash flow after tax and statutory deductions.

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FAQs

Which salary number should I use for budgeting?

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Use net monthly salary, because that is the money actually available for expenses, EMIs, savings, and goals.

Reviewed by the Saventh Financial Literacy Team. Educational information for Indian employees — not personalised advice. Mutual fund investments are subject to market risk. Saventh AMFI ARN 324457.

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