CTC vs. In-Hand Salary: Seeing a large CTC figure often leads one to believe that the monthly take-home pay will be substantial; however, the reality can be quite different. In the tech industry, it is not uncommon for an employee with a lower CTC to actually take home a higher monthly in-hand salary.

CTC vs. In-Hand Salary: When we hear that someone has a salary package of ₹50–60 lakhs, we naturally assume their monthly earnings must be extremely high. The sheer magnitude of the salary figure suggests that a higher CTC equates to higher earnings—but in the tech industry, this is not always the case. Frequently, an employee with a lower CTC ends up taking home a larger monthly in-hand salary.

This discussion gained traction when Devansh Bhandari, a Founding Engineer at the Y Combinator-backed startup Wavelength, shared a post on X (formerly Twitter). He revealed that one of his friends has a CTC of ₹62 lakhs at Google, while another friend works as a remote contractor earning ₹36 lakhs annually.

The Math Behind Google’s ₹62 Lakh CTC

According to Devansh, the ₹62 lakh package at Google breaks down as follows:

₹22 lakhs: Basic Salary

₹35 lakhs: RSUs (Restricted Stock Units/Stock Grants)

₹5 lakhs: Bonus

RSUs are not received as immediate cash. Instead, they vest gradually over a period of four years. Consequently, after taxes and deductions, the employee’s actual in-hand salary remains in the range of approximately ₹1.5 lakhs to ₹1.8 lakhs per month.

Earnings of the Remote Contractor with the ₹36 Lakh Package

The majority of the remote contractor’s earnings are received directly in cash. Under Section 44ADA of the Income Tax Act, eligible professionals can declare only 50 percent of their total income as taxable. This results in a lower tax liability. According to Devansh, after taxes, such a contractor can receive an in-hand amount of up to approximately ₹2.7 lakhs per month.

Why Such a Significant Discrepancy?

The primary reason for this is the salary structure.

Large companies incorporate bonuses and stock options into the CTC (Cost to Company), components that are not received as immediate take-home pay. Conversely, in contract-based roles, the majority of the compensation is paid directly in cash.

What was the public reaction?

Many users commented that including the entire RSU (Restricted Stock Units) allocation in the CTC creates a misleading impression. Meanwhile, others argued that while stock options yield benefits over the long term, when it comes to the actual cash received in hand on a monthly basis, a remote contractor may end up earning more.

Should one focus solely on the take-home salary?

No, jobs at large corporations offer additional perks such as job security, health benefits, brand value, and opportunities for career growth. Remote jobs, on the other hand, offer the advantage of higher cash-in-hand, coupled with lower expenses.