CTC (Cost To Company)

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CTC is the yearly expenditure that a company spends on an employee. Each employee’s CTC depends on their basic salary and variables. In colloquial terms, it is also termed as total salary package, i.e., the cost an employer bears to hire, train, and sustain its employees. 


To understand the concept better, here are a few questions that we have answered for you:

What is a CTC salary example?

If the annual basic salary of an employee is ₹5,00,000 and on top of that, the company pays an additional ₹50,000 for their health insurance, the CTC is ₹5,55,000. 

What is monthly CTC?

While making an employment offer, the employer mentions a total annual salary package on the payslip after adding all types of earnings and benefits to the basic pay. If you divide that number by 12 (months in a year), then the monthly salary attained is also known as the monthly CTC.

How is CTC calculated? 

CTC is calculated by adding salary and additional benefits that an employee receives such as EPF, ESI, gratuity, house allowance, food coupons, medical insurance, and travel expenses among other factors.

CTC = GROSS SALARY + BENEFITS

What is the difference between Gross Salary and CTC?

Gross salary is the amount an employee receives as a salary, prior to making deductions. As opposed to the net salary, gross salary is the income which is typically stated on an annual basis, before any deductions or taxes come into effect. CTC, on the other hand, refers to the total amount that the employee will cost the company including all the benefits.

CTC is the yearly expenditure that a company spends on an employee. Each employee’s CTC depends on their basic salary and variables. In colloquial terms, it is also termed as total salary package, i.e., the cost an employer bears to hire, train, and sustain its employees. 

Also Read: CTC Breakup: All Your Salary Components Decoded!

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Sukriti Saini

Sukriti Saini works as a content marketing strategist at HROne. She has done Bachelors in Journalism from Delhi University and carries several years of experience in content development. HR trends, Productivity, Performance and topics related to Employee Engagement garner most of her writing interest here. During leisure, she loves to write and talk about fashion, food & life.

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