The amount actually credited to an employee's bank account after all deductions — also called take-home salary.
Net Salary, or take-home salary, is the number that matters day to day: what actually lands in the bank account after every employee-side deduction is subtracted from Gross Salary. Those deductions typically include the employee's PF contribution, Professional Tax, and TDS.
Calculating it is a two-step process — first subtract employer-side contributions from CTC to get Gross Salary, then subtract employee-side deductions from Gross Salary to arrive at Net Salary. The gap between CTC and Net Salary is usually the single most confusing part of an offer letter for a new hire.
Formula
Net Salary = Gross Salary − (Income Tax/TDS + Employee PF + Professional Tax)
MedleyHR handles PF, ESI, TDS, and Form 16 automatically — free for up to 10 employees. Start free →
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