Must to know about designing CTC-Cost to Company of an employee



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CTC -Cost to Company



CTC- This term is confusing for many people and my post will help them to understand this better. Definition of Cost to Company differ from company to company and every company has its own structure and salary components which company wants to make part of CTC. For simple understanding, let me define CTC which includes cost which company incur on employee in form of statutory contributions, reimbursement, benefits and sometime administrative costs other than Gross salary of employee.



We will understand all the possible components which company can put in CTC and what is the impact of these components on your in hand and tax liability.



CTC includes various components like:



Fixed Salary : It includes Basic, DA, HRA, Conveyance, City compensatory Allowance, Special Allowances etc



Variable Salary : It includes Performance based incentive, Sale based incentive and Profit based bonus.



Reimbursements : It includes reimbursement of conveyance, medical, telephone, Books and Periodicals, Leave Travel Allowance.



Contributions: It includes the benefits offered by the company like Provident Fund, ESI, Superannuation, Gratuity,

Statutory Bonus, Medical Insurance, Accident Insurance, Leave encashment etc.



Stock Options: Stock Options







Read more : http://hrsuccesstalk.com/2014/04/22/must-to-know-about-designing-ctc-cost-to-company-of-an-employee/