For a salary of 4.5 CTC in-hand salary is ₹32,000 – ₹33,000 after all deductions like EPF, health insurance, professional tax, etc. If your salary is mentioned as 4.5 LPA, then your in-hand salary will be around ₹34,000 to ₹35,000 after deductions.
If your salary is stated in LPA, you will receive a higher in-hand salary compared to the salary mentioned in CTC.
Why There is a Difference Between 4.5 CTC and 4.5 LPA Salary
CTC stands for Cost to the Company, it includes all the monetary benefits the company provides to the employee i.e. every rupee spent on the employee including the employer PF contribution, bonus, etc.
While LPA indicates the employee’s income, any additional financial benefits to the employee, such as the employer’s PF contribution or bonus, are not included.
Every company sets its own payroll policy, and they clearly state these details in offer letters. So read the offer letters carefully before accepting the job.
Estimated Salary Break Down for 4.5 CTC Salary
| Monthly | Annually | |
|---|---|---|
| Earnings | ||
| Basic Wage | 16875 | 202500 |
| House Rent Allowances | 6750 | 81000 |
| Conveyance/Transport Allowances | 1600 | 19200 |
| Medical Expenses | 1250 | 15000 |
| Other/Special Allowances | 11025 | 132300 |
| Deductions | ||
| EPF Contribution by Employee | 1800 | 21600 |
| EPF Contribution by Employer | 1800 | 21600 |
| Health Insurance | 1000 | 12000 |
| Professional Tax | 200 | 2400 |
| Net Salary (Total earnings – Deductions) | 32,700 | 3,92,400 |
Key Points
- The basic wage is calculated at 45% of the gross salary of 35,000 per month. (Companies will calculate basic around 40-50% on gross to match with the minimum wages in their state).
- HRA (House Rent Allowances) are 40% of the basic wage in non-metro cities, and 50% in metro cities like Delhi, Mumbai, Kolkata, and Chennai.
- Conveyance and medical allowances are fixed rates.
- The balance amount remaining on all earnings is called other allowances (or) special allowances.
- EPF is calculated at a 12% rate on the basic wage. If your salary is mentioned as CTC, both employee and employer PF contributions will be taken from the employee’s salary.
- Your health insurance premium depends on the scheme type and policy benefits.
- Professional tax difference is each state, every month PT will be deducted from your salary.
Estimated Salary Break Down for 4.5 LPA Salary
| Monthly | Annually | |
|---|---|---|
| Earnings | ||
| Basic Wage | 16875 | 202500 |
| House Rent Allowances | 6750 | 81000 |
| Conveyance/Transport Allowances | 1600 | 19200 |
| Medical Expenses | 1250 | 15000 |
| Other/Special Allowances | 11025 | 132300 |
| Deductions | ||
| EPF Contribution by Employee | 1800 | 21600 |
| Health Insurance | 1000 | 12000 |
| Professional Tax | 200 | 2400 |
| Net Salary (Total earnings – Deductions) | 34,500 | 4,14,000 |
The main difference between the above examples is, that in CTC employer’s PF contribution is also deducted from the employee’s salary. In LPA employee PF contribution is paid by the employer. It applies if the company provides any bonuses and other monetary benefits.
FAQs
LPA is easy to understand, you will simply know how much in hand salary you will get. Whereas CTC is a little difficult to understand for employees.
When you want to accept a job offer, always check how much in hand salary and other benefits you will get after all deductions.
It’s important to consider the total benefits such as in-hand salary, health insurance, and additional allowances like leave travel allowances, etc. before making any decision.
Some companies provide better benefits in CTC, and some in LPA, so the decision should be yours.
It is around ₹ 33k to ₹ 34k per month.
It is ₹37.5k per month.
It is ₹32k to 33k per month.
it is ₹37.5k per month month.
Yes, it is a good salary in India that fulfills basic requirements such as house rent, utility bills, and shopping.
No tax.
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