CTC Full Form: CTC isn’t an unknown term for job professionals. However, many individuals make some common mistakes. If you are one of them and get confused between gross salary and CTC, we will help you out.

In this article, we will share all crucial information about CTC. Plus, we will also share how CTC is decided and calculated. If you are just starting your professional life, this guide will be very helpful. So, let’s get started.

Cost to Company is the full form of CTC. In simple words, CTC is the total salary package of an employee. Well, that doesn’t mean that the monthly salary is CTC. It’s more like the total expense of the company on a worker.

That means all the facilities and additional expenses are also part of the Cost To Company. In most cases, CTC includes medical facilities, phone bills, meals, travel allowance, house facilities, and more. On the other hand, some companies also include office space rent on CTC.

Plus, if your company provides other accommodations like a car, driver, or house, the value will be added to CTC as well. So, it depends on the company’s accommodations. That’s the base of CTC calculation.

## How to Calculate CTC

You see, most people have no idea how CTC is calculated. In most cases, they think the salary is CTC. In reality, there are so many things. However, we can say the CTC calculation depends on that company’s requirements, rules, and regulations.

However, a company needs several components to calculate CTC including basic pay, reimbursements, allowances, Public Provident Fund, life insurance, health insurance, professional tax, income tax, and Provident Fund.

Every company decides on CTC as per these components. So, you can say the Cost to Company is the combination of the gross salary and other benefits.

## How is CTC Decided

Well, an employee’s CTC depends on multiple factors. And it varies from individual to individual. CTC can change as per the worker’s promotion. For example, if you get a promotion, your company will increase the CTC as per your monthly salary. In the following list we will share these factors of CTC:

• Qualifications
• Years of work experience
• Promotion
• Previous CTC

## Difference Between CTC and Payslip

As we noted before, the Cost to Company isn’t the monthly salary. CTC includes multiple things such as travel allowance, housing allowance, health insurance, pension, and more. Payslip doesn’t provide these benefits. However, CTC doesn’t include the company’s internal services like management support, IT support, or HR support.

## Conclusion

You see, Cost To Company is very important for the company and the workers. And it also depends on various things. We have shared how you can calculate CTC before joining a company. If you need more information, you can start your research.

## FAQs

Is CTC monthly salary?

No, CTC isn’t a monthly salary. It’s the total cost that a company spends on a particular employee. The monthly salary is included in CTC.

How is CTC calculated on the payslip?

A company calculates CTC by adding the salary and additional expenses of a worker.

What is the CTC in salary?

CTC is the total expense of a company on a particular employee. The salary package is one of the parts of CTC.

Is CTC the same as Gross Salary?

CTC has so many things included such as salary package, tax benefits, contributions, and reimbursements while gross salary has basic pay, dearness allowance, and house rent allowance.

What is CTC benefit?

CTC is the total calculation of direct benefits, indirect benefits, and other contributions.