The full form of CTC is Cost to company. CTC refers to the amount of money a firm spends on an employee on an annual basis. The cost to the company for each employee is determined by their base wage and other factors. In layman’s words, it’s also known as the whole wage package, which refers to the costs a firm incurs in hiring, training, and retaining personnel.
This amount does not fall in any of the above mentioned allowance.
Cost To the company is not the same as Gross Salary. The amount an employee receives as pay before deductions are referred to as gross salary. Gross salary, as opposed to net salary, is the amount of money earned on a yearly basis before any deductions or taxes are taken into account. Cost to the company, on the other hand, refers to the overall cost to the firm of the employee, including all perks.
The CTC is the sum of all the financial and non-financial benefits given to an employee. The CTC can be calculated by using the following formula:
CTC= Gross Salary + Direct Benefits + Indirect Benefits
For example, if an employee’s salary is Rs. 35,000 and the company also pays an additional bonus of Rs. 5,000 for health insurance, the CTC is Rs. 40,000.
The full form of CTC is Cost To Company. CTC is the employee’s annual salary package.
Current Total Compensation you are earning, which includes salary, bonus, and other perks.
Cost to Company, it is the cost a company spends on hiring an employee. Gross Salary is the amount that is payable to the employee before deductions of taxes and after deducting EPF and gratuity from the CTC.
CTC refers to salary package of an employee whereas in hand salary refers to the amount received by the employee after all the deductions.
Get 20% off on
HR & Payroll Software