What is the meaning of take – home pay?
In simple words, take – home pay means that it is the net earnings of the salary or that of the wage earner. In other words, this word take – home pay means that it is the money which an employee receives when an employee works. And this happens to be after some aspects like the following are deducted – the employment taxes / cost of the benefits / retirement contributions.
Take – Home – Pay Calculator
Terms related to take – home pay calculator
Listed below are the various terms that are related to the take – home pay / salary calculator along with their meanings. Keep reading to know more. Gross salary means an individual’s income. This income is before the deductions are made & these deductions are inclusive of the taxes. However, one has to remember that this gross salary is not like that of the net salary.
On the other hand, CTC or the cost to company is meant to be the total salary package of the employees. It includes the total amount being spent on the employee by the employer in a year. The sum of money which is given to the employee when the employment period ends is known as gratuity. Finally, taxable income happens to be the amount of income which is put in to use in order to calculate the income tax due.
What are the formulae used in a take home salary or a take home pay calculator?
\(\Rightarrow \, taxable\, income\)
\(\Rightarrow\, take\, home\, salary \,or\,take\,home\,pay\)
\(=gross\, salary\, -\)\(income \,tax-\)\(employee’s\,PF\,contribution(PF)-\)\(professional \,tax \)
How to use an online take – home pay calculator?
If you wish to use this online take – home salary calculator then you will have to follow the following steps – in the 1st field, you should enter the monthly basic then select the financial year. An individual will also have to mention the CTC on the annual basis.
One may also select as to whether they are senior citizen or live in a metro. By clicking on the advanced option tab, you can enter the PF followed by the following things – EPF / gratuity / conveyance / ELSS, LIC, H. Loan / HRA / medical bills / professional tax / food vouchers / mediclaim / H. Loan interest / infra. Struc. Bonds / LTA / savings acc. Int / other 100 % Exe. / RGESS 50 % Ex / other 50 % Exe. When the above details have been mentioned, you can go ahead & click on the calculate tab to know as to how much will be your net salary.