Monday, 27 January 2020

What is CTC and How to Drive It?

What is CTC

CTC means Cost to Company i.e. total amount going to spend for an employee in a year. It includes his/her salary and other benefits/ Allowances/ Variable Pay which he/she is going to receive. Benefits/ Allowance can be any thing like EPF (employee and Employer both), Medical Insurance, Bonus, Gratuity, LTA etc.

Most of the time employee may get confused with CTC and gross salary.

CTC is the amount a company spends on an employee and Gratuity is what it pays to the employee at retirement or at the time of leaving (as per the gratuity clause). However, Gross Salary is what a company pays to an employee before deductions and Net Salary is what an employee receives after deductions. Major deductions are EPF, ESI, Income Tax, Profession Tax, Labor Welfare Fund.

Sample CTC Structure:



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