CTC Definition & Meaning | What is Cost to Company? | CTC Calculation

What is CTC (Cost to Company)?

CTC stand for Cost to Company for an annual year. So, basically, CTA meaning is the total cost a company would incur for employing one employee per year. CTC salary means – a total salary package , inclusive of basic salary, EPF, and variable pay like– house rent allowance, conveyance allowance, medical insurance, travel allowance & dearness allowance.

The monthly salary ( fixed pay) and other added benefits that the company pays to an employee are actually calculated as the cost to the company. The cost of company meaning is a commonly used term for denoting this in a company. Moreover, if you add stock , incentives and financial benefits – then it is called total remuneration.

CTC includes all monetary and non-monetary amounts spent on an employee when they start working for the company. They are part of the remuneration structure but are not received as a salary and yet the CTC is definitely increased. Everything from reimbursed money to gross salary to the health insurance is part of the CTC salary as well. Most of the CTC consists of mandatory deductibles on the company and employee’s behalf.

Ex gratia payments are usually calculated as a percentage of the employee’s CTC, depending on the company’s policies. In some cases, an ex gratia payment may be given in addition to a salary increment, bonus, or other benefits.

CTC in salary meaning includes all monetary and non-monetary amounts spent on an employee when they start working for the company. They are part of the remuneration structure but are not received as a salary and yet the CTC is definitely increased. Everything from reimbursed money to gross salary to health insurance is part of the CTC salary as well. Most of the CTC consists of mandatory deductibles on the company and employee’s behalf.