Tech offers in India usually arrive dressed up in variable pay, joining bonuses and ESOP grants that inflate the headline CTC well past what the recipient actually receives.
About this calculator
Tech offers in India usually arrive dressed up in variable pay, joining bonuses and ESOP grants that inflate the headline CTC well past what the recipient actually receives. A 42 lakh CTC with 30% variable and 20 lakh ESOP looks like a huge jump from a 30 lakh flat-fix role, but after discounting variable pay to 85% of target, spreading ESOP over a four-year vest, subtracting notice-period buyout and relocation costs, and paying tax on the whole thing, the real first-year delta can be less than 5 lakh.
This calculator runs the honest comparison. It computes net after-tax income under the new regime for both CTCs, applies a realistic 85% payout assumption on variable pay, treats the joining bonus at 70% after tax and notice buyout, spreads the ESOP linearly over the vesting period at face value, and subtracts switching costs from the first-year bump. It then projects three years forward using an 8% natural salary growth assumption on the current role. The output is the real rupee delta over the full horizon, not just the single-year headline.
Three caveats. One, ESOP at private companies is worth zero until a liquidity event; count it at 50% of face value for pre-IPO startups if you want a conservative comparison. Two, variable pay depends entirely on the firm's culture; ask current employees what the actual payout has been over three years. Three, the real reason to switch is almost never pure money -- growth, role, manager, team and learning matter more over a career. Use the calculator to size the financial side, not to decide. See [[income-tax]] for the slab math and [[cost-of-living]] if the switch involves relocation.
Common uses
- Mid-level engineer weighing a 40% CTC jump with big variable pay and ESOPs
- Senior engineer evaluating an offer from a pre-IPO startup with heavy ESOP and lower fixed
- Comparing two competing offers with very different structures
- Sizing the real cost of notice buyout and relocation against a headline hike
- Deciding whether the counter-offer from the current employer actually matches the external offer
Frequently asked questions
How much real hike does the offered CTC translate to?
Strip out variable pay at 85% of target, spread ESOP across the vest, deduct notice buyout and relocation, and tax the whole thing. A 40% CTC jump usually produces a 20-28% net in-hand jump, sometimes less if the fixed portion is small.
Should I count ESOPs in the comparison?
At face value for public companies. At 0-50% of face value for private companies without a clear liquidity event. For pre-IPO companies, count only what would vest in the first two years and treat the rest as a lottery ticket.
Is variable pay really paid at 100% of target?
Almost never. Large firms pay 80-95% of target in normal years and 50-70% in bad years. Startups can go as low as zero. Ask current employees before you model variable pay as a reliable number.
Should I accept a counter-offer from my current employer?
Data suggests roughly 50% of accepted counter-offers lead to the employee leaving within 12 months anyway. The counter-offer tells you the employer could always have paid more and chose not to until you forced their hand. Weigh the money against that signal.
What about notice period buyout?
Notice buyout is typically 1-3 months of fixed salary and must come out of your joining bonus. Count it at the gross cost, because it is usually paid by the new employer but may be clawed back if you leave within a year.