New salary after a hike.
New CTC
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Your breakdown
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Worked example
Suppose your current CTC is Rs 12,00,000 and you receive a 30 percent hike. The new CTC is the current figure multiplied by 1 plus the hike, so Rs 12,00,000 times 1.30, which is Rs 15,60,000. That is an increase of Rs 3,60,000 a year, or about Rs 30,000 more a month before tax. A 30 percent jump is typical of a job switch in India, whereas an in-company appraisal more often lands around 8 to 12 percent. Working the same maths backwards: a 10 percent appraisal on Rs 12,00,000 would take you to only Rs 13,20,000, an increase of Rs 1,20,000 a year. The gap between the two, about Rs 2,40,000 a year, is why switching every two to three years is a common salary-growth strategy. Remember the hike is on CTC, so the rise in take-home is smaller once higher tax slabs apply.
How it is calculated
The new salary is simply the current salary multiplied by 1 plus the hike percentage expressed as a fraction, so a 30 percent hike multiplies by 1.30. The annual increase is the new figure minus the current one, and the monthly increase is that divided by 12. The reverse calculation, finding the hike percentage between two salaries, divides the increase by the old salary and multiplies by 100. One point worth keeping in mind is that a hike on CTC does not translate one-for-one into take-home, because a larger salary can push part of your income into a higher tax slab and raise PF contributions. To see the in-hand effect of a new CTC, run the new figure through the in-hand salary calculator.