Salary Hike Calculator

A salary hike in Indian appraisals is usually (new CTC − old CTC) / old CTC. A jump from ₹6 lakh to ₹7.2 lakh is 20%, or ₹1.2 lakh a year, ₹60,000 a month on the new CTC. That is not the same as a 20% rise in in-hand, because PF, tax slabs and variable pay can move at the same time.

Why CTC is not in-hand

Engineers in Bengaluru and sales staff in Ahmedabad argue about “20% hike” when one letter raised basic and the other stuffed the rise into a joining bonus. This page is strictly two annual numbers. Use it to decode the letter, then run the CTC-to-in-hand tool on both years if you care about rent money.

What we subtract

Percentage increase = (new − old) / old × 100. Defaults: ₹6,00,000 to ₹7,20,000 → 20%, annual increase ₹1,20,000, new monthly CTC ₹60,000.

If variable pay is 10% of the new CTC and unpaid until June, your April cash is not 20% higher. Split fixed versus variable before you celebrate.

Promotions that reset the bonus cycle or ESOP grants are outside this percentage. They still matter; they just are not this formula.

₹6 lakh to ₹7.2 lakh in an Ahmedabad appraisal

Neha’s letter moves annual CTC from ₹6,00,000 to ₹7,20,000. IndiaKit prints 20% and ₹60,000 as the new monthly CTC. She then discovers ₹80,000 of the new CTC is a target bonus. She reruns in-hand on ₹6.4 lakh fixed so the rent decision in Navrangpura is honest.

Payroll is still the source of truth

Does not tax the increment, does not split variable, does not annualise a mid-year hike. A rise in July is not a full-year 20% in that financial year.

Common questions

My hike is on basic, not CTC. Which numbers do I enter?

Enter the two figures you were actually comparing. If the letter says basic ₹40,000 to ₹46,000, those annualised values belong here. If it says CTC, use CTC. Mixing them produces a meaningless percentage.

How do I annualise a hike that starts in October?

This tool compares two annual rates, not FY cash. For FY cash, take six months at the old rate and six at the new, then compare to the previous FY — a different arithmetic.

Does a 20% CTC hike mean 20% more in-hand?

Often less, because income tax is progressive and PF may rise with basic. Run both CTCs through the in-hand calculator.