Glossary   >  CTC


What is CTC?

CTC stands for “Cost To Company,” which is a commonly used HRM terminology. It’s the total spend of the company towards the employees on various elements of salary. It includes basic salary, DA, bonus, gratuity, variable pay, and the cost of all the benefits offered to the employees.

How To Calculate CTC?

The calculation for CTC is stated as

CTC = Gross pay + Statutory additions (PF + ESI + Bonus)

Frequently Asked Questions About CTC

How to calculate CTC of salary?

CTC is the addition of the gross salary and the statutory additions such as PF, ESI and the bonus. Wherein,
PF stands for Provident Fund. It is a scheme for the employees to invest for their retirement stage.
ESI stands for Employee State Insurance. It is a social security scheme offered to the employees by the government.
Bonus is the performance bonus given by the employer after the analysis of the employee’s performance.

What are the components of CTC?

The components of CTC are :

  • Basic salary
  • Incentives or Bonuses
  • PF, ESI
  • Allowances

What does the expected CTC mean?

The expected CTC is the term used for the employee’s expected salary from the organization from the CTC.

What is a take home salary?

Take home salary is the net salary of an employee after the statutory deduction and involuntary contributions of their payee.

What are the kinds of benefits an employee gets?

Below mentioned are benefits for the employees:

  • Direct Benefits: The amount paid to an employee on early basis
  • Indirect Benefits: The amount paid by the employer on the behalf of the employee
  • Saving Contributions: Saving schemes enrolled by the employee

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