1. What Is Cost To Company?

Cost To Company (CTC) represents the total amount of money a company spends on an employee in a year. It includes direct benefits (salary, allowances) and indirect benefits (provident fund, insurance, etc.).

2. How Is CTC Calculated?

The calculator uses the CTC formula:

Where:

• \( Basic \) — Basic salary component (INR)
• \( Allowances \) — House rent allowance, travel allowance, etc. (INR)
• \( Benefits \) — Medical insurance, bonuses, gratuity, etc. (INR)
• \( PF \) — Provident Fund contribution (INR)

Explanation: CTC represents the total cost incurred by the company for employing an individual, including all monetary and non-monetary benefits.

3. Components Of CTC

Details: Understanding CTC components helps employees know their complete compensation package and employers to structure competitive salary packages.

4. Using The Calculator

Tips: Enter all salary components in Indian Rupees (INR). Ensure all values are positive numbers representing annual amounts.

5. Frequently Asked Questions (FAQ)

Q1: What is the difference between CTC and take-home salary?
A: CTC is the total cost to company, while take-home salary is the amount received after deductions like taxes, PF, and other contributions.

Q2: Is CTC the same as gross salary?
A: No, CTC includes all benefits and contributions, while gross salary typically refers to the amount before deductions but may not include all CTC components.

Q3: What percentage of CTC is basic salary?
A: Typically, basic salary is 40-50% of CTC, but this varies by company policy and industry standards.

Q4: Are bonuses included in CTC?
A: Yes, performance bonuses, annual bonuses, and other variable pay components are included in the CTC calculation.

Q5: How is PF calculated in CTC?
A: PF is usually 12% of basic salary from both employee and employer, but the employer's contribution is part of CTC.