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.
The calculation for CTC is stated as
CTC = Gross pay + Statutory additions (PF + ESI + Bonus)
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.
The components of CTC are :
The expected CTC is the term used for the employee’s expected salary from the organization from the CTC.
Take home salary is the net salary of an employee after the statutory deduction and involuntary contributions of their payee.
Below mentioned are benefits for the employees: