How to negotiate a salary hike
A negotiation goes better when you know what the number is worth in your account, not on the offer letter. This is how to work that out, what to ask for, and what to say.
1. Decide your number in take-home terms
CTC is the figure employers quote and take-home is the one you spend. Start from the second. Write down three monthly figures before you speak to anyone:
- Your floor. The monthly in-hand below which you decline.
- Your target. The figure you would be pleased with.
- Your opening ask. A little above the target, with a reason you can state.
The in-hand to CTC calculator turns a monthly figure into the CTC you would need to quote to get it, so you can ask in the currency the employer uses while protecting the number you actually need.
2. Know what each step of the ask is worth
A raise is taxed at your highest rate, so the extra you ask for is worth less than its face value. On a ₹12,00,000 CTC, here is what each ask delivers:
| Ask | New CTC | Monthly in-hand | Extra a month | Real hike |
|---|---|---|---|---|
| 15% | ₹ 13,80,000 | ₹ 99,076 | ₹ 11,276 | 12.8% |
| 20% | ₹ 14,40,000 | ₹ 99,178 | ₹ 11,378 | 13% |
| 25% | ₹ 15,00,000 | ₹ 1,02,845 | ₹ 15,045 | 17.1% |
| 30% | ₹ 15,60,000 | ₹ 1,06,512 | ₹ 18,712 | 21.3% |
Look at the first two rows. The 20% ask is ₹ 60,000 more CTC than the 15% ask but adds only ₹ 102 a month in hand. Both land near ₹12,00,000 of taxable income, where the tax that marginal relief had been holding back arrives quickly. Spending a negotiation on that stretch buys little. If an offer sits there, a joining bonus or part of the pay routed into employer NPS is a better use of the ask.
Asking for 30% rather than 20% is ₹ 1,20,000 more CTC and ₹ 7,334 more in your account each month. That is the number to hold in your head when deciding whether a stretch ask is worth the friction. Your own figures will differ, so run them in the salary hike calculator.
3. Negotiate the structure, not only the total
Two offers with the same CTC can leave you with different take-home. These are the parts worth asking about:
- Fixed against variable. Variable pay is paid only if targets are met. Ask what share of the CTC is guaranteed and what the recent payout has been.
- The PF cap. Some employers let you cap PF at ₹1,800 a month. On a ₹ 15,60,000 CTC, the calculator's model puts that at about ₹ 11,064 more in hand each month. It is a trade of retirement savings for cash today, and not every employer allows it, so ask rather than assume.
- Joining bonus and notice buyout. One-time amounts are easier for an employer to agree to than a permanent rise in fixed pay.
- The review date. An early review with a written criterion can be worth more than a small difference today.
- Where your taxable income lands. Near ₹12,00,000 of taxable income, an extra rupee of pay can cost more than a rupee in tax. The calculation guide explains the band, and the calculator warns you when an offer lands in it.
4. What to say
Keep it short, specific and warm. Three lines that work as a template:
State the ask once, give one reason, and then stop talking. Filling the silence is where most people negotiate against themselves.
5. Before you accept
- Get the offer and the salary structure in writing.
- Convert both the old and the new package to monthly in-hand, on the same regime.
- Separate the guaranteed pay from variable pay.
- Check the notice period, any clawback on bonuses, and gratuity timing.
- Only then decide, and only then reply.
The full checklist, with the tax reasoning, is in the guide to calculating a salary hike.
Frequently asked questions
Should I name my number first or wait for the employer to?
There is no rule that always works. If you have solid information on what the role pays, naming a figure first sets the range in your favour. If you do not, asking for their range first avoids anchoring below what they were prepared to pay. Either way, know your floor in take-home terms before the conversation starts.
Is it acceptable to negotiate a first job offer?
Yes, politely. A short, specific request with a reason is normal in hiring, and a reasonable employer expects it. The worst usual outcome is that the offer stands as written, so ask once, clearly, and then decide.
What should I negotiate besides the CTC figure?
The structure: the fixed and variable split, a joining bonus, notice-period buyout, the review date, and whether PF can be capped. Two offers with the same CTC can put very different amounts in your account each month.
How do I compare two offers with different structures?
Convert both to monthly in-hand under your likely tax regime. Then look at the fixed component separately from variable pay, since variable is paid only if targets are met. The in-hand calculator does the conversion.