What is CTC in Salary? CTC Full Form & how it is calculated

CTC full form is Cost to Company. It is actually the total annual salary of an employee of any organization or company. It implies absolute salary bundle and facilities got by worker in a year including free suppers, taxis, and loans those are absolutely interest free.

CTC FULL FORM

CTC Full Form is Cost to Company. Every month pay and different advantages that the organization pays an employee are really cost to the organization.

The CTC bundle is a term frequently utilized by private Indian companies while making a proposal of employment to the employees.

Cost to Company (CTC) isn’t the real pay of the employee. It additionally incorporates the services given to the worker during his working time frame.

CTC means the absolute compensation bundle and advantages got by worker in a year including free suppers, taxis, and loans those are absolutely interest free.

What is CTC?

CTC is a term mainly used by the private companies and South Indian companies, when they make an offer of employment to the employees. Cost to Company (CTC) isn’t the real pay of the employee. It additionally incorporates the services given to the worker during his working time frame.

What is CTC Package in India?

The CTC package shows the full salary including the Basic Salary, HRA and other benefits and allowances. CTC contains all the monetary and non-monetary benefits spent on an employee.

Read More: TRP full form and how it is calculated?

What is CTC Gross Salary?

The gross salary before Income Tax and different derivations is what is recorded as Cost to Company (CTC) pay for a time of a year in a budgetary year.

All the below mentioned are a part of the in-hand salary, and therefore, is a part of the CTC pay as well:

1. Basic Salary
2. Bonuses or Incentives
3. Dearness Allowance (DA)
4. House Rent Allowance (HRA)
5. Conveyance Allowance
6. Vehicle Allowance
7. Leave Travel Allowance (LTA)
8. Medical Allowance
9. Mobile or Phone Allowance

CTC= Gross Salary + Incentives (Bonuses) + Other Expenses

What you get in hand salary will always remain less than your CTC.

What is CTC in Resume?

When you fill in the CTC in your resume, it will help your new employer to know the current gross salary including all benefits.

What is Net Salary?

Net Salary is the In-Hand Salary after deducting the TDS or Income Tax and other deductions like Employee Provident Fund (EPF) etc. from the gross salary.

In-Hand Salary = Gross Monthly Salary – TDS – Employee Provident Fund (EPF) – Other Deductions

CTC Direct Benefits

It’s paid to the employee per month after deducting the income tax (TDS) etc.

CTC Indirect Benefits

For these types of benefits, employee doesn’t need to pay anything. Company adds these expenses as a monetary value in the CTC, as it is an expense for the company.

1. Food Coupons —- Many companied provide free lunch and snacks for their employees.
2. Interest free loans —- Many companies provide home and car loans to their employees at very low interest rates & add the amount equal to the difference between the market rates and subsidized interest rate to employee’s Cost to Company (CTC).
3. Insurance Premiums —- Many companies provide GMC and Life Insurance to their employees and add the cost in their CTC.
4. Free cabs —- Many companies provide free taxi facilities to the employees and add them to their CTC.
5. Company Accommodation —- Many companies directly pay to the landlord or provide you paid accommodation, and then they add the monetary value of the accommodation to the CTC of the employee.
6. Income Tax Savings —- Sometimes companies offer the employees some benefits which are tax-free for employees but are taxable to them. They then add the value to the CTC.
7. Office Space Rent —- If a company is spending 15K per month on the space that you would sit in at your work location or office, they would add the yearly rent for the same in your CTC.

Read more: Insights of Event Blogging

Employee Savings

These payments are made by your employer for your Long Time Duration Savings.

• Employee Provident Fund —- The employees give the 12% of basic salary to Employee Provident Fund (EPF) and the employer also give 12% to the same EPF account. This is not taxable.
• Gratuity —- You cannot withdraw this before 5 years. It’s paid @4.81% of total basic salary. If you leave the company before 5 years, you will lose this gratuity amount.
• Superannuation —- It is a way of saving some money for retirement, in this scheme, a predefined amount is deposited every month in  Superannuation account. You can withdraw this money in 2 situations only: 
• a) When you leave the organization. 
• b) When you retire.

How does CTC calculated in India? (CTC Calculator)

CTC= Gross Salary + Incentives (Bonuses) + Other Expenses

Conclusion

So, I am pretty much sure that now you all know CTC, full form of CTC, CTC meaning, the difference between Gross Salary and CTC, how is CTC calculated in India and all other expects of CTC.

If there are any doubts or suggestions, feel free to comment below and if you like the post, then do share it in your social media.

Ta-Da!!!

Frequently Asked Questions about CTC