CTC full form means Cost To Company in India It’s the yearly salary package of a worker. It signifies the total expenses which a company/organization spends on a worker in a year. Nowadays, the majority of companies offer their wages in the kind of CTC.
CTC is not the actual salary of the employee. It also includes the facilities given to the employee during the service period. It clearly suggests that CTC full form is not just the salary, but in addition, it has many things such as meals, medical facilities, phone bills, home facilities, traveling allowance, etc..
Some companies especially big investment banks add office space leases in the CTC package. Furthermore, if your organization provides you accommodation, vehicle, driver, etc, the value of those facilities will be included in your CTC.
CTC full form and benefits:
CTC full form means Cost to the company.
It is the total amount that it is spending on its employees. It includes the in hand salary+P.F.+ ESI+ other perks the company is giving. Perks may include the mobile bill, cafeteria allowances, other special allowances, transportation allowance. In short, it is the total money that the company is spending to maintain it’s the employee.
What are the benefits of CTC, let’s know, friends from CTC Full Form, an employee gets many other benefits besides salary, some benefits are available to the employee with salary and you will know some benefits later. All these benefits have been divided into three categories, which are as follows –
Direct Benefits – Direct benefits are called benefits that are added to the employee along with salary, these benefits are as follows.
- Basic Salary
- Conveyance Allowance
- Dearness Allowance
- House Rent Allowance
- Vehicle Allowance
- Mobile Phone Allowance
- Incentives and Bonuses
Indirect Benefits – Indirect benefits are called the benefits that an employee receives from salary, these benefits are as follows.
- Interest-free loans, if any
- Company Leased Accommodation
- Income tax savings
- Office Space Rent
- Food Coupon, Subsidized meals
Saving Contributions – These facilities are available to the employee only after taking retirement from the job, the savings contributions are as follows:
- Employer Provident fund
- Superannuation benefits
What is CTC Gross Salary?
Gross salary before income tax and other deductions is what is listed as Cost to Company salary for a period of 12 months in a financial year.
What is a CTC Package?
The CTC package shows basic salary, HRA (house rent allowance) and other similar allowances. Please note that CTC includes all monetary and non-monetary amounts spent on an employee.
The value of CTC is for a company. This is the value that the company is spending on a particular employee in a year.
There are usually 3 terms that are commonly used in the Indian pay structure
- Total salary
- Gross salary
- Cost to the company / CTC
The company provides a fixed salary structure for the employee for one year. This includes Basic Salary, Traveling Allowance, Dearness Allowance, Human Resource Allowance, Food Allowance, Provident Fund (both Employee and Employer) and Variable Pay. It is known as CTC.
Hence, CTC = Net Salary + Deduction + PF of both parties + Variable Salary + Incentive (if any).
Gross salary is the salary that a company is providing on a monthly basis. Say, the gross salary of an employee is 20K (basic salary 10K and 10K other incentives) + 20K annual variable salary. Since the basic salary is 10K, the employer will have to contribute 12% of the basic salary to the provident fund / PF.
By this, the cost to the company will be gross salary * 12 + variable salary + PF contribution * 12
20k * 12+ 20k + 1200 * 12
240,000 + 20000 + 14400
Therefore, CTC is 274,400 with a gross salary of 20C. Now, his basic salary is in the form of 10K, so as per government rules, India’s 1200 rupees will also be deducted from his salary. Suppose ESIC’s other deduction, Mediclaim, is INR 800. Then his net salary will be 18,000.
18,000 will be his salary.
Gross salary = Net salary + deduction
This is the beauty of the salary structure that a person with 274,400 CTC is getting 18K as net salary every month.