Salary Calculator

Salary is compensation received by an employee from an employer for giving the work and time to the employer for completing the assigned task. Salary is usually given for a cumulative period be it daily, hourly, biweekly or monthly.

In a company, a person is employed as a freelance or as a permanent employee. Freelancers are not eligible for benefits such as bonuses, tax benefits, leaves, etc. but the compensation amount given to freelancers is higher as compared to salaried employees for the same nature of work.

What is the salary calculator?

  • It is an online tool for doing the salary calculation in the units, you want. Whether you want to see how much you earn in an hour or daily, or monthly or weekly basis. All figures will be generated in minutes.  This salary application is tuned with all local, state and national taxes and levies. 
  • The salary calculator calculates net salary after tax deduction. Again, you can see this result (Net Salary after-tax deduction) in any unit you desire.
  • In the salary calculator, according to local and national rules, your working week, days and months are already factored in it.
  • In this calculator, one can fill details of saving and other tax-saving instruments too.
  • Specialized versions of salary calculators are also available in the market for your utilization.
  • There are take-home salary calculators and income tax calculators including many others.

Process of using a salary calculator

It is always recommended to make use of the salary calculator which pertains to the country in which you are getting your salary.

  • Input your monthly basic pay.
  • Input your Cost to Company (CTC).
  • Input whether you work in a Metro city or not. Delhi, Chennai, Mumbai, and Kolkata are usually considered metro cities in this respect.
  • Input your savings, loans and other investment details.
  • Input the details of the benefits i.e. conveyance allowance, medical allowance, food vouchers, Provident Fund, Leave Travel Allowance (LTA) you get in your salary.
  • When you click ‘Calculate’, as per the current financial year, your taxable income, HRA, and gross income is calculated.

Salary Calculator working

Firstly, the salary calculator calculates your Gross salary.

Gross Salary = Cost to the company (CTC)- Employer’s Contribution (Provident Fund and Gratuity Amount)

 After calculating the gross salary, it determines your Taxable income.

Taxable Income = Gross Salary – Employees Provident Fund Contribution- Conveyance allowance- House rent allowance – leave travel allowance-medical insurance-tax saving investments-any other deductions.

Then the salary calculator application finds out the Income-tax using application of current income tax rules, regulations, slabs, and rates.

We all know that the Income Tax slab rates are keep on changing with every financial year’s budget. So, make sure to always apply the newest rates to the salary calculator app.

After that Salary calculator application calculates the take-home salary. 

Take-home salary = Gross Salary- Income Tax – Provident Fund – Professional Tax

Please note that values received through the Salary Calculator app may not match your salary slip due to the following reasons:

  • If your salary structure has a Variable Pay Component, then probably that Variable Pay is paid to you monthly, annually, quarterly or bi-annually. This is the months; your salary is calculated through this application will be less than your take-home salary.
  • Moreover, your salary calculator assumes that the Employee Provident Fund that is deducted from your salary is 12% of the basic pay and that the gratuity is 4.81% of your salary’s basic component. If your PF deduction is not online with the above-made presumption, the salary calculated through the app will be different.

Although, you can manually enter the correct deduction details for achieving accurate results.