What is CTC Components #
CTC Components refers to the Cost to Company that occurs to the company in a year on each employee. Cost to Company (CTC) refers to the employee’s salary package, inclusive of all direct components such as basic pay, reimbursements, various allowances, commission, gratuity, variable pay, bonus, etc. CTC also includes indirect benefits such as health care, pensions, housing, travel, and entertainment allowances. In simple, Cost to Company is the total amount a company spends on direct or indirect benefits on their employees.
CTC = Direct Benefits + Indirect Benefits + Employer’s Contribution in Savings.
Direct benefits include basic salary, medical allowance, house rent allowance, dearness allowance, leave travel allowance, vehicle allowance, phone allowance, incentives, bonus, and special allowance.
The indirect benefits are interest fee loans, subsidized meals, food coupons, company leased accommodation, life and medical insurance premiums, income tax savings, and office space rent.
Employer’s contribution in savings is employee provident fund, gratuity, superannuation benefit, etc. savings contribution is the monetary value added to the employee’s CTC.
To view the CTC components, navigate to Settings > Payroll settings, and you can view the CTC Components.
Following are the CTC Components,