'Your CTC is lying to you!': CA breaks it down why your Rs 12 lakh offer feels like Rs 70K a month

Every year, thousands of fresh graduates and mid-career professionals celebrate landing a job with an impressive Cost to Company (CTC). But a few months into the role, reality sets in—and often, it's jarring.

“People are shocked when they see their in-hand salary is far lower than the CTC they were promised,” said CA Abhishek Walia, a chartered accountant and payroll advisor. “That’s because CTC and take-home pay are two very different things.”

The confusion stems from the fact that the CTC figure includes multiple components that aren’t immediately accessible as cash.

Let’s break it down:

Gratuity is part of the CTC but is only payable after completing five years of continuous service.

Employer’s contribution to Provident Fund (PF) is technically yours, but it’s locked in a retirement fund and not liquid.

Performance bonuses are often discretionary and may be delayed or never paid in full.

ESOPs (Employee Stock Option Plans) can sound lucrative, but they only hold value if exercised at the right time and become liquid.

Insurance premiums (health/life) paid by the employer are benefits, but not part of your monthly net pay.

Walia said: "Your CTC is lying to you! Every year, lakhs of freshers and experienced professionals celebrate offer letters with eye-popping CTCs. But a few months in, reality hits: “Why is my in-hand salary so low?” Here’s the truth: CTC ≠ Take-Home Pay."

 

“So when a company says your CTC is Rs 12 lakh, the actual money hitting your account monthly might only be Rs 60,000–Rs 70,000,” Walia noted. “That’s a significant gap, and young professionals must be aware of it.”

Walia urged employees to stop planning monthly expenses around the headline CTC figure. “Your net income after deductions is the real number you can spend or invest. That’s what matters,” he stressed.

He also advised new hires to study their payslip carefully, understand each line item, and not to rely on uncertain components like bonuses or ESOPs for regular expenses.

“Treat bonuses as windfalls, not guaranteed income,” he said. “And before accepting an offer, ask detailed questions—What is fixed? What’s variable? Is there a vesting period for ESOPs? These answers can make or break your financial stability.”

Ultimately, Walia said, understanding your real paycheck is about more than money—it's about making informed choices. “It’s not about what you’re offered on paper. It’s about what you keep, grow, and protect.”