Finance question
How much should I save from my salary every month?
Last updated 2026-09-17
Quick answer
There is no Indian law that says “save 20%”. A workable sequence is: (1) build 3–6 months of expenses as an emergency fund, (2) pay high-interest debt, (3) aim for 20–30% of take-home toward SIPs, PPF and EPF already coming off the payslip. If a home EMI is 40% of in-hand, your extra savings rate will be lower until income rises.
Calculate your numbers
Tables below use stated assumptions. Change rate, tenure or income in the calculator for your case.
Open SIP50/30/20 is a teaching split, not a rule
50% needs, 30% wants, 20% saving is a US-origin heuristic. Indian households with a large EMI or parental support will not match it. Use it only as a conversation starter, then plug leftover rupees into SIP or PPF calculators.
Formula
Savings rate ≈ (take-home − essentials − EMI) / take-home. EPF employee share already counts as forced saving.
Example scenarios
If you aimed for 25% of take-home as extra investing (EPF extra)
| Take-home / month | 25% toward SIP/PPF |
|---|---|
| ₹40,000 | ₹10,000 |
| ₹50,000 | ₹12,500 |
| ₹80,000 | ₹20,000 |
| ₹1,00,000 | ₹25,000 |
| ₹1,50,000 | ₹37,500 |
Ignore this band if EMI plus rent already consumes most of the salary — fix that first.
What changes the answer
- EMI load
- Dependants
- Whether EPF is already 12% of basic
- City rent
Things to consider
- Saving while carrying 16% personal-loan interest is usually worse than prepaying that loan.
- Percentages are planning heuristics, not SEBI or RBI mandates.
Results are educational estimates, not tax, legal, investment, or medical advice, and not a loan offer. Verify filings and payments with the official authority or a qualified professional.
FAQs
Yes. Employee PF is saving. Employer PF is also yours over time but is not extra cash this month.