Salary hike: percentage, both ways
Two salaries in, the hike percentage out, or a percentage in, the projected new CTC out. Both directions, plus the compounding view recruiters never show you.
Your inputs
The result
CTC-to-CTC comparison — remember the structures behind two CTCs can differ (fixed/variable split, basic size), so an equal-percentage hike can move in-hand unequally. Decode both in the salary calculator.
Reading a hike like a negotiator
The formula is trivial ((new − current) ÷ current × 100) but three readings make the number useful. Compare like with like: a hike quoted on CTC can hide a shrunken fixed component, so recompute on fixed pay before celebrating. Read the monthly delta, not just the percentage: 25% on ₹8 lakh is about ₹16,700 more a month before tax effects, which is the number your budget actually feels. And think in compounding: two 12% years beat one 25% year held for two: the calculator's compounding line shows what a percentage becomes over multiple cycles, which is the honest frame for choosing between a retention counter and an external offer.
On the employer side, a revision is an effect-dated structure change: applied from its date, arrears computed if processed late, TDS reprojected: the mechanics PeopleDeck's payroll engine runs when the increment letter becomes a payslip.
A worked example
₹8,00,000 to ₹10,00,000 is a 25% hike — about ₹16,667 more per month at CTC level. But if the old package was all-fixed and the new one carries ₹1,50,000 at-target variable, the fixed-pay hike is only 6.25%: the comparison that matters in a bad quarter. Meanwhile a colleague taking 12% retention hikes two years running lands at ₹10,03,520 (marginally ahead of the single 25% jump held flat) which is the compounding arithmetic worth running before any loyalty-versus-switch decision.
Illustrative — tax effects and structure differences will move the real in-hand delta.
Frequently asked questions
How is hike percentage calculated?
(New CTC − current CTC) ÷ current CTC × 100. The calculator runs it both directions: two salaries to a percentage, or a percentage to a projected package, plus the compounding view across cycles.
Should I compare hikes on CTC or fixed pay?
Fixed pay, a CTC hike that moves money into at-target variable can be a smaller real raise than the percentage suggests. Recompute the percentage on the fixed components of both packages before deciding anything.
What is a good hike percentage?
Context decides: annual cycles, promotions and market switches run on different scales, and the same percentage means different things at different bases. The durable insight is compounding — regular moderate hikes accumulate faster than rare large ones held flat.
Does a hike change my PF and gratuity?
Yes; if basic rises, PF contributions (above-ceiling cases), gratuity accrual and leave-encashment value all ride the higher base. A hike restructured to hold basic flat quietly withholds that growth.
How do backdated increments work in payroll?
As effect-dated revisions: the new structure applies from the effective date, the months in between compute as arrears with workings on the payslip, and TDS reprojects. That mechanism is the payroll engine's job.
Revisions with arrears, computed.
Effect-dated increments become correct payslips automatically — PeopleDeck, per employee.
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