Your first salary: a beginner's guide

Your offer letter said ₹6 lakh a year. The first credit in your account is around ₹42,000, maybe less. Three weeks later, most of it is gone, and you’re not sure where.

Nobody taught us this, so here it is in order: what to check when your salary lands, what to set up in the first month, and how to plan every month after that.

The short answer

• Your take-home is smaller than CTC ÷ 12. Part of your CTC is never paid to you monthly (employer PF, gratuity, variable pay), and some is deducted before it reaches you (your PF, professional tax, income tax).
• On salary day, do three things in order: pay what’s already spoken for, move your savings out, then split what’s left by week.
• In your first month, set up five things: check your payslip, tell HR your tax regime, activate your UAN, start an emergency fund, and list every repeating payment.

Why your first salary looks smaller

Meet Aarav. He’s made up, but his numbers are typical: ₹6 lakh CTC, basic pay at 50% of CTC, PF on his full basic, gratuity included in CTC, the new tax regime, and a state that charges ₹200 a month in professional tax.

Aarav’s month	₹
CTC ÷ 12	50,000
Employer’s PF (goes to his PF account, not his salary)	−3,000
Gratuity (paid only if he stays 5 years)	−1,202
Gross pay on his payslip	45,798
His own PF (12% of basic)	−3,000
Professional tax	−200
Income tax (TDS)	0
Take-home	42,598

His PF isn’t lost: both his share and his employer’s go into his PF account as retirement savings. And there’s no income tax at this salary under the new regime for tax year 2026-27.

Your numbers will be different. Put your CTC into the Payslip Decoder to see yours under both tax regimes.

One first-month surprise: if you joined mid-month, your first salary covers only the days you worked. If you joined after the payroll cut-off date, it may arrive with next month’s salary. Ask HR for the cut-off so you aren’t caught short.

Step 1: Check your payslip (10 minutes)

When the payslip arrives, check:

• Your details: name, employee ID, PAN and the last digits of your bank account.
• The maths: earnings add up to gross pay, and gross pay minus deductions equals net pay. Net pay should match what reached your bank.
• PF: usually 12% of your basic pay (plus DA, if you get it). Some employers cap it at 12% of ₹25,000, which is ₹3,000 a month.
• Professional tax: usually up to ₹200 a month, and nothing at all in some states.

Save every payslip in one folder. Landlords, banks and visa applications ask for them.

The Salary Breakdown tab in the First Salary Kit does these checks for you: copy in your payslip and it flags anything to ask HR about.

Step 2: Tell HR your tax regime

• The new regime is the default. If you say nothing, your employer works out your monthly tax (TDS) under it.
• The old regime helps only some people, usually those who pay rent and have enough deductions to claim. The Payslip Decoder compares both for your salary.
• Choosing the old regime? Tell HR at the start of the year (or when you join), and give proof of rent and investments on Form 124, which used to be called Form 12BB. No proof, no saving.
• You can still switch when you file your tax return. Salaried people can choose a different regime every year.

By 15 June each year, your employer must give you Form 130 (it used to be called Form 16). It shows your salary and the tax deducted for the year. Keep it: you’ll need it to file your return.

Step 3: Activate your UAN and add a nominee

Your UAN (Universal Account Number) is your PF account number for life. It stays the same when you change jobs.

1. Ask HR for your UAN. If you don’t have one yet, or it isn’t activated, use the UMANG app (“UAN Allotment and Activation”). It verifies you with your Aadhaar and a face scan. Since July 2026, the EPFO website no longer activates UANs.
2. Log in to the EPFO member portal and check that your employer’s PF deposits appear each month.
3. Add a nominee: the person who gets your PF if something happens to you.

When you change jobs, give your new employer the same UAN so your PF moves with you.

Step 4: Plan salary day (15 minutes, every month)

Do this on the day your salary lands, before you spend anything:

1. Write down what’s already spoken for. Rent, money you send home, EMIs, bills, phone, travel to work, subscriptions. These come first.
2. Move your savings out first. Pick an amount you can keep up, even a small one, and move it to a separate account the same day. What you don’t see, you don’t spend.
3. Split what’s left by four. That’s your spending money for each week. When it’s gone, that week is done.

For Aarav: ₹42,598 take-home − ₹17,450 already spoken for − ₹9,000 savings = ₹16,148 to spend. That’s about ₹4,037 a week.

There’s no fixed percentage that works for everyone. Your rent, your family and your city decide the numbers.

Step 5: Start an emergency fund

An emergency fund is money for a job loss, a medical bill or a family emergency. Keep it somewhere you can reach in a day or two, like a separate savings account. Don’t keep it in shares, where it could be worth less exactly when you need it.

Set your goal in months of essentials (rent, bills, groceries and the other must-pays). Aarav’s essentials come to about ₹21,450 a month. A 3-month goal is ₹64,350. At ₹6,000 a month from zero, he gets there in about 11 months. Your number of months is your call: think about how long it could take you to find another job.

Step 6: List every repeating payment

Write down everything that repeats: rent, phone, internet, streaming, music, gym, EMIs, insurance. Note the amount and the due date. Then ask of each one: still worth it?

• Use autopay only for things you’d pay anyway, so you never miss a due date by accident.
• If you get a credit card, pay the full bill each month, not the “minimum due”. Interest on the unpaid amount adds up fast.

Two things to skip in month one

• Big EMIs for gadgets. Your first salary feels like a lot until rent, travel and bills take their share. Pehle budget, phir gadget.
• Investment tips from strangers. Learn how something works before you put money in. We teach how investing works; we never recommend specific stocks or funds.

What to do next

1. This week: check your payslip, tell HR your tax regime, and activate your UAN on UMANG.
2. On salary day: do the 15-minute plan, and move your savings out first.
3. Get the First Salary Kit: a free Google Sheet that reads your payslip, plans salary day and tracks repeating payments. It comes with The Weekly Bonus, one useful lesson every Saturday.

The figures are for tax year 2026-27 and a made-up example. Payslips differ by employer and state, so ask HR when something doesn’t match.