In-hand Salary
In-hand (or take-home) salary is the amount an employee actually receives after deductions from gross pay — employee provident fund, professional tax, and income tax. It is lower than both gross salary and Cost to Company.
In-hand salary is the net figure that lands in an employee's bank account each pay cycle, arrived at by starting from gross salary, meaning all cash components such as basic, allowances, and any cash bonus paid that period, and subtracting the employee's own EPF contribution, professional tax where the state levies it, TDS under Section 192, and ESI contribution where the employee is covered.
It should not be confused with CTC, which additionally includes employer-side costs, namely the employer's EPF contribution, gratuity accrual, and any benefits like insurance, that inflate the headline offer number without ever appearing in the employee's payslip. The resulting gap between CTC and in-hand pay commonly leaves take-home pay at roughly 65-80% of CTC, depending on how much of CTC is structured as basic salary versus allowances and benefits, and on the employee's income tax slab.
For US companies setting compensation for India hires, understanding this gap matters for candidate communication: quoting only CTC without explaining the in-hand estimate is a common source of offer-negotiation friction, since candidates evaluate offers on take-home pay, not the CTC headline.