Your recurring monthly credit, your annual net cash, and what changes if variable pay is not paid in full.
Corrected 29 August 2026. An earlier version of this page excluded target variable pay from both received cash and taxable salary, which understated income tax. Figures are recalculated under model PS-A3. What changed →
Short answer: ₹20 lakh a year is ₹1,66,667 a month before anything is deducted. After employer costs, provident fund and tax, a ₹20 lakh package pays a recurring monthly credit of ₹1,28,203. Including the ₹2,00,000 target variable paid in full, annual net cash is ₹17,38,431 — 86.9% of CTC.
Tax Year 2026-27 · model PS-A3 · 40% basic · 10% target variable, primary scenario assumes 100% of it is paid · provident fund on the capped ₹15,000 wage basis · professional tax excluded because it varies by state · employer NPS not modelled. Your employer’s structure will differ.
| Figure | Amount | What it is |
|---|---|---|
| Regular monthly net | ₹1,28,203 | Your recurring bank credit. Excludes variable pay. |
| Annual net cash | ₹17,38,431 | Everything received in the year, including variable actually paid. |
| Annual net ÷ 12 | ₹1,44,869 | Not recurring monthly pay — an average only. |
| Component | Annual |
|---|---|
| CTC | ₹20,00,000 |
| Employer PF (not paid to you) | ₹21,600 |
| Gratuity provision (not paid to you) | ₹38,462 |
| Target variable (paid separately) | ₹2,00,000 |
| Fixed annual cash | ₹17,39,938 |
| Actual variable paid (100% scenario) | ₹2,00,000 |
| Salary cash | ₹19,39,938 |
| Taxable after ₹75,000 standard deduction (s.19) | ₹18,64,938 |
| Income tax incl. cess | ₹1,79,907 |
| Employee PF | ₹21,600 |
| Professional tax | ₹0 (state-dependent, excluded) |
| Annual net cash | ₹17,38,431 |
Employer PF is still ₹21,600 a year on the capped basis, because the ₹15,000 wage ceiling has not moved. On a ₹20 lakh package that is 1.1% of CTC, down from 4.3% at ₹5 lakh.
Where the capped basis applies, statutory retirement saving stops scaling with your salary here. Some employers contribute on full basic wages instead — on that basis your total PF would be ₹1,92,000 a year rather than ₹43,200. Check your payslip.
| Scenario | Variable paid | Annual net cash | Income tax | % of CTC |
|---|---|---|---|---|
| None paid | ₹0 | ₹15.80 L | ₹1.38 L | 79.0% |
| Half paid | ₹1,00,000 | ₹16.59 L | ₹1.59 L | 83.0% |
| All paid (primary) | ₹2,00,000 | ₹17.38 L | ₹1.80 L | 86.9% |
Unpaid target variable is not a deduction and not money permanently lost. It is pay that was targeted and not earned in that year, and it is not taxed.
The figures above use the capped ₹15,000 wage basis, where employee and employer each contribute ₹21,600 a year. If your employer contributes on full basic wages instead, the combined contribution is ₹1,92,000 a year and annual net cash becomes ₹16,05,106. Both bases are permitted — check your payslip.
| CTC | Regular monthly net | Annual net cash | Annual tax | % of CTC |
|---|---|---|---|---|
| ₹5 LPA | ₹33,099 | ₹4.47 L | ₹0 | 89.4% |
| ₹6 LPA | ₹40,438 | ₹5.45 L | ₹0 | 90.9% |
| ₹8 LPA | ₹55,118 | ₹7.41 L | ₹0 | 92.7% |
| ₹10 LPA | ₹69,797 | ₹9.38 L | ₹0 | 93.8% |
| ₹12 LPA | ₹84,477 | ₹11.34 L | ₹0 | 94.5% |
| ₹15 LPA | ₹99,027 | ₹13.38 L | ₹89,630 | 89.2% |
| ₹18 LPA | ₹1,16,923 | ₹15.83 L | ₹1.39 L | 87.9% |
| ₹20 LPA | ₹1,28,203 | ₹17.38 L | ₹1.80 L | 86.9% |
| ₹25 LPA | ₹1,54,862 | ₹21.08 L | ₹3.00 L | 84.3% |
| ₹30 LPA | ₹1,79,004 | ₹24.48 L | ₹4.51 L | 81.6% |
| ₹40 LPA | ₹2,26,901 | ₹31.23 L | ₹7.57 L | 78.1% |
| ₹50 LPA | ₹2,74,799 | ₹37.98 L | ₹10.63 L | 76.0% |
Primary scenario: 100% variable payout, capped PF, professional tax excluded, Tax Year 2026-27.
Your recurring monthly credit is about ₹1,28,203. Over a full year, assuming all of the ₹2,00,000 target variable is paid, annual net cash is ₹17,38,431 — 86.9% of CTC. Professional tax is excluded because it varies by state.
About ₹1,79,907 for Tax Year 2026-27, on taxable salary of ₹18,64,938 after the ₹75,000 standard deduction under section 19(1). If none of the target variable is paid, tax is ₹1,38,307 instead, because unpaid variable pay is not taxed.
Annual net cash falls from ₹17,38,431 at full payout to ₹15,80,031 at nil payout, and tax falls from ₹1,79,907 to ₹1,38,307. Your recurring monthly credit of ₹1,28,203 is unaffected, because variable pay is normally paid separately.
CTC includes employer costs that never enter your account: employer provident fund of ₹21,600 a year and a gratuity provision of ₹38,462. Target variable pay of ₹2,00,000 is also normally paid separately rather than monthly.
Related: Salary Calculator · Income Tax by Salary · Monthly CTC to In-Hand · CTC to In-Hand Guide · Research index · All CTC levels