CTC full form
CTC Full Form – What is CTC ? It is a package is a term often used by private sector Indian companies while making an offer of job for which he/she will have to work for them..CTC contains all monetary and non-monetary amounts spent on an employee.
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What Is CTC? And What Is It In Relation To Salary
What is CTC?
CTC or salary package refers to the yearly pay or salary that is offered to an employee who has been selected for a job and who is about to start their assignment. CTC is offered to workers in the form of a monetary value and non-monetary benefits which comprise of certain privileges, training, an office and vehicle. The salary offered by the company is the company’s revenue, the company’s cost and the revenue of the manager who has hired the worker. CTC differs from base pay because there is no limit on the amount that is given as salary. There are certain limits fixed by the government on certain income categories. Source: gurudev.com The monetary value of CTC varies from country to country. In India, most companies offer between ₹ 5 to ₹ 7 lakh as CTC to their employees.
What is the difference between CTC and Salary?
Salary is the amount on which the employee is paid to work for an organization. It is one of the most important aspects of recruitment process for making an offer to the employees. Salary varies as per the working conditions, job satisfaction, perks and social security benefits that an organization has. But there is a difference between salary and CTC. How CTC works? CTC works in a slightly different manner than salary. In a CTC, the employer specifies the amount of CTC that he/she wants to pay to an employee. What is bonus? Bonuses are usually negotiated as part of salary package. What is the purpose of bonuses? Bonuses are paid to the employees as a reward for his/her hard work and achievements. Bonuses are paid in the form of cash, stocks, options etc.
How can you calculate CTC?
Well, in India, the most frequently used method for computing CTC is through Total Cost of Employment (TCOE) model. The TCOE model helps you understand how much your new hire will cost the company before the date of joining. And after the completion of the tenure, this model will help you calculate the cost of leaving the employee. So, there is a lot to be considered in calculating CTC. How Does CTC Work? TCOE- The Total Cost of Employment (TCOE) model considers only fixed cost while calculating CTC. It does not include variable expenses like: Salary Equipment Expenses on recruitment Travel Training Accommodation Any other expenses which are variable are excluded in calculating CTC.
What is the advantage of calculating the CTC?
Unlike salary, no monetary value is fixed in the CTC. So, the bonus is there. But it depends on a person’s performance. So, an employee is bound to bring his/her own bonus to the company. Many companies now try to define and provide a good CTC without changing the amount of salary. It gives a sense to an employee that his/her salary is increased every year. CTC is used by employers to keep track of salary package. How to calculate CTC? CTC is calculated through following procedures: 1. Assume that you got a new job. Once you come to your office, then you will be assigned your main job with annual increments. Later, you will be given other tasks by your supervisors, which you need to accomplish by the end of the month. This job pays around Rs 8-12 lakh per annum.
CTC is a reasonable price for a package along with additional details like location in India, current pay package of other employees, current contract duration, signing bonus etc. The cost of CTC in India will differ from company to company, as they use different standard models. This article provides the list of companies and their standards for CTC. If you have any questions related to CTC then do ask us. We will help you in any way possible.