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All-in-one HR platform · v2.0
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All-in-one HR platform · v2.0
14-day free trial · No credit cardhello@HrMagix.com
The employer's total annual cost of employing someone: gross pay plus the employer's own contributions and any other costs attributed to the role. It is higher than gross, and it is never an amount the employee receives.
Frequently quoted as though it were salary. Gross is what is earned before deduction; take-home is what reaches the bank; CTC is what the employer spends.
HR uses CTC mainly when making offers and planning increments. An offer letter usually shows an annexure that breaks CTC into monthly salary components, employer PF, gratuity provision, insurance premiums and any variable pay, so the candidate can see why take-home pay is lower than the headline figure.
Example: an annual CTC of ₹9,00,000 might include employer PF of ₹21,600 on a ₹15,000 PF wage, a gratuity provision, group health premium and ₹60,000 of target variable pay. The fixed monthly gross the employee receives is what remains, before employee PF, professional tax where the state levies it, and TDS.
The common problem is candidates comparing CTC figures between companies that include different items. Including variable pay at full target, or the gratuity provision, inflates CTC. HR should state each item clearly and explain which parts are paid monthly, which yearly and which only on conditions such as five years of service.
Cost to company: the employer's total annual cost of employing someone, gross pay plus the employer's contributions and other attributed costs.
No. It is frequently quoted as salary, but it is what the employer spends, not what the employee receives.
Gross is what is earned before deductions; CTC adds the employer's own contributions and other costs on top.
Take-home is what reaches the bank after deductions; CTC is the employer's full cost, which is always higher.
Because it includes the employer's own contributions and other costs attributed to the role.
No. CTC is never an amount the employee receives.
CTC is expressed as an annual figure.
The salary calculator works from CTC through gross to take-home.
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