Get Instant Loan up to ₹10 Lakh!
CTC vs take-home salary: The shocking gap you didn’t know about—Viral post reveals how to boost your income
It is unlikely that a job will always give financial freedom, but leveraging multiple income streams could help achieve certain financial goals.
While many professionals assume that a higher Cost to Company (CTC) translates directly into a bigger paycheck, the reality is far from it. Understanding the gap between CTC and take-home salary is crucial for employees looking to plan their finances effectively.
A viral post by an HR professional on Linkedin recently shed light on this discrepancy. The post broke down the common misconception, stating: “Many professionals assume that a higher CTC means significantly more money in hand. But the truth is: 10 LPA ≠ ₹83,333/month (it's closer to ₹70,500). 50 LPA ≠ 5x your take-home (it’s ~ ₹2,80,917, only 4x!).”
According to the HR professional, “As your CTC grows, a big chunk goes into: Taxes (5-20%), benefits & deductions (insurance, PF, ESOPs), variable pay (which you may not always receive).”
“At the end of the day, you often take home just 50-60% of your CTC. And the higher your salary, the bigger this gap gets!”
Further, the HR professional advised salaried professionals to generate multiple sources of income.
The expert's advice? To secure financial freedom, relying solely on your salary might not be enough. Instead, diversifying your income sources is key. The HR professional shared several valuable tips for salaried employees.
In his LinkedIn post, he wrote:
“A salary alone won’t make you financially free. You need to: Invest in passive income sources – A small business, rental property, or stocks can create additional cash flow. Learn high-value skills – Skills that don’t trade time for money (like trading, consulting, or automation) offer greater earning potential. Monetize your expertise – Many top professionals eventually build their own businesses or consultancies. Plan and budget wisely – Smart investments and financial discipline can help you grow wealth beyond your paycheck.”
Salary hike in 2025
Indian employees can expect an average salary increment of 9.4 per cent across industries in 2025, indicating strong economic growth and rising demand for skilled talent, according to Total Remuneration Survey (TRS) by HR consulting firm Mercer.
Over the last five years, salary increments have steadily increased, rising from 8 per cent in 2020 to a projected 9.4 per cent in 2025, the report revealed.
The automotive sector leads with an anticipated increment of 10 per cent, up from 8.8 per cent, driven by the surge in electric vehicles and the government-led 'Make in India' initiative. Manufacturing and engineering follow closely, with increases from 8 per cent to 9.7 per cent, reflecting a resurgence in the manufacturing ecosystem.
More than 1,550 companies from various sectors, including technology, life sciences, consumer goods, financial services, manufacturing, automotive, and engineering participated in the survey.
Catch all the Business News , Breaking News Events and Latest News Updates on Live Mint. Download The Mint News App to get Daily Market Updates.
Business NewsNewsCTC vs take-home salary: The shocking gap you didn’t know about—Viral post reveals how to boost your income
First Published:1 Feb 2025, 08:08 PM IST
- Top Gainers
- Top Losers
- 52 Week High