Salary Hike Calculator Guide

In most Indian offer letters and appraisal letters the hike percentage is applied to your current annual CTC — the full cost to the company, including employer PF contribution, gratuity provision, insurance and any variable or performance pay. That means the base number is usually larger than your fixed salary, and larger still than the amount that reaches your bank account each month.

Some employers instead quote the hike on fixed pay only, and some quote it on gross monthly salary. Before you compare anything, ask which base is being used. A 15% hike on fixed pay and a 15% hike on CTC are different amounts of money.

New CTC = Current CTC × (1 + hike ÷ 100). The annual increase is simply New CTC − Current CTC, and the monthly CTC equivalent of either figure is that figure divided by twelve. Nothing more complicated is happening; the difficulty is entirely in choosing the right input.

Priya earns ₹6,00,000 CTC (6 LPA) and is offered a 20% hike. Her new CTC is ₹6,00,000 × 1.20 = ₹7,20,000, an annual increase of ₹1,20,000, or ₹10,000 more per month in CTC terms.

Now suppose ₹60,000 of that new CTC is a performance bonus paid only if company targets are met, and employer PF rises by roughly ₹7,000. The guaranteed fixed portion has grown by closer to ₹53,000 a year, not ₹1,20,000. The hike is still real — but the monthly difference she feels is a fraction of what the headline suggests. Run both the full CTC and the fixed-only figure through the calculator to see the range.

Internal appraisal hikes and job-change hikes are usually not comparable at face value. A job change often resets your variable component, joining bonus, notice-period obligation and leave balance. If you are weighing a switch, compare the fixed annual pay of both options first, then treat variable pay as a separate, uncertain line.

• Comparing a CTC-based hike at one employer against a fixed-pay-based hike at another.
• Adding percentages across years. Two consecutive 10% hikes are a 21% total increase, not 20%, because the second applies to the raised figure.
• Assuming the whole increase reaches your bank account. Employer PF and gratuity are part of CTC but are not monthly take-home.
• Ignoring a joining bonus, which inflates year one only and does not repeat.

Our calculators do not know your salary structure, tax regime, city or employer policy, so they cannot produce a payslip. Treat the output as a comparison figure for planning, and confirm the actual breakup with HR before making a decision.