Mallet
Senior Analyst - Talent Management
Dileep1117
Service
Sangeethar
Dy Manager - Hr
Niku
Sales & Marketing
Lnbattacharya
Hr Executive
Shripsacharya
Manager (administration)
Darkhorse
Internet Marketing Analyst
Amskam
Hr Professional
Shankartvl
Sales Personnel
Deep_1982
Recruitment Support Specialist
Bhaveshr
Hr Generalist
+7 Others

Thread Started by #shripsacharya

Dear all members,
Now a days most of companies offer their package in form of CTC (cost to company). Is there any guide line to compute CTC I mean which payments to an employee should include while computing CTC ? Here it is also informative to add that all companies calculate the same in their own way some of them even include all reumbersment like conveyance exp. etc. and a step more some includes FBT paid by the company on his expenses.
Now we if we take it from the employee's point of view at some place he gets cash in hand only 50-60% of monthly CTC what he was assured at the time of recruitment..Some time it gives a very bad impression to employee like a robbery over his salary.
All members are requested to post their views and guidance.
With Regards
Pradeep
28th October 2006 From India, New Delhi
Hi Pradeep
We cannot call it as robbery over his salary. It is what we are paying him indirectly.
To make it simple the monthly salary includes all his allowances along with basic and DA. This is used in calculating his gross salary for a year. Along with this there are other benefits such as LTA, Medical Domiciliary, Bonus etc which we include in his CTC thus making it a complete whole.
If an employee avails a LTA or avails reimbursement from his medical domiciliary we actually pay it. That is what we are projecting in the CTC.
So it would be better to explain this to a new commer if you think that you have to maintain a good impression.
Hope this could have cleared your doubt to some extent.
Comments from others are welcomed..
Regds
Sangeetha
28th October 2006 From India, Madras
Hi,
After a candidate qualifying all the interview formalities the HR can have a one-to-one meeting session to discuss in detail about the CTC.
The salary breakups can be properly given and take home salary can also be given to them. Indirect and direct emoluments can be discussed in detail.
In brief "SALARY OF AN UPCOMING EMPLOYEE SHOULD BE SHOWN IN BLACK AND WHITE."
This will fetch a good name to the organization and will help to maintain a wonderful employee relationship.
Regards,
LN Battacharya
28th October 2006
Comments on this topic has already been posted in this forum earlier but to quickly recap, any amount that the company spends for the benefit of its employee can be calculated under Cost to Company. This will include medical insurance, accident policy, subsidised lunch / food, any attire / apparel / furnishing / shoe etc. provided (outside of office), PF, Gratuity.



Once committed in writing the company should, for its long-term benefit, honour it and pay the employee at the time of full & final settlement in the event of the employee's resignation. Hence it will not be considered a robbery even though the employee is not getting the compensation in his monthly component.



During the time of the salary discussion / negotiation the company should explain the benefit of any component of the salary that is not part of the monthly component like tax benefit (LTA, Medical reimbursement etc.), retiral benefit (PF, Gratuity etc.).



All this said, it will be easier to attract new employees only of the monthly component of the compensation is high.
29th October 2006
Hi
I think this issue will be cleared once the candidate gets his appointment letter. usually we give clear salary split-ups in appointment letter. at times of HR interview round we finalize the commercial part by getting his/her expected CTC and work out accordingly after negotiation.
I hope this would clear any doubts at the time of induction.
29th October 2006 From India, Madras
Dear shri,
WE NORMALLY INCLUDE :
GROSS SALARY,
PF,
ESI,
LEAVES,
BONUS,
GRATUITY
LTA,
MEDICAL
INSURANCE,
IN TO THE CTC BUT IF YOU GO DETAIL AS WE ARE INCLUDING APART FROM ABOVE IS
UNIFORM ,
CANTEEN,
TRANSPORT,
TRAINING COST,
GESTATION PERIOD EXPENCES ( WHEN A EMPLOYEES JOINS IT TAKES
MINIMUM 2 MONTHS TO PERFORM
TO HIS FULLEST )
PLACE TO SIT / ( BECAUSE IT HAS SOME MARKET VALUE )
STATIONARY COST
COMPANY'S SPONSER TOURS,
GIFTS AND INCENTIVES ( IF ANY )
PRANAV
29th October 2006 From India, Pune
CTC or Cost to Company is defined as "the amount spend by a company to maintain an employee for a period of one year.
My suggestion is:
Any person whose accepting a new job should breakup the CTC into two.
1. Monthly Fix
2. Monthly Variable
And also look at whats Yearly fixed.
I think then a person would have an idea as to what exactly comes in Hand.
Regards,
Mallet.
:lol:
29th October 2006 From India, Hyderabad
Hi ,
Always better to explain in detail about the Cost 2 Company while job offering a prospective employee.
A prospective employee after recieving his offer letter the only question running in mind is ' What will be my Take home ? '. Its advisable to have Salary break up template more self explainatory viz; The Components of Gross, other Annual payments, Employers contribution PF, Deductions(both PA & PM) and thus giving no room for any robbery. So the impression is not lost rather gained more.
Cheers,
Naveen
30th October 2006 From India, Madras
Sorry; but i am still confused about CTC brakup can some let me know about % of each brakup and how it is going to be calcualated. Niku
8th May 2007 From India, New Delhi
dear niku, there is no specific percentage for calculation of ctc. its depend on the practices & attachement of the management to the issue of ctc. amar
13th May 2007 From India, Delhi
Just wanna know about Salary Break-ups! Are there any standard break-up rules that needs to be followed. Anyone there who can answer this?
13th May 2007 From India, Hyderabad
dear all, i am really clearly clarrified for CTC. the employee should be clarrified himself before joining with the organisation about his take home pay etc, with the HR at the time of receiving the order. tks to all. shankar
31st October 2007
hi all, for ctc basic break up would be like (in most org)
12 % of PF(both employer & employee)
20 % of HRA in metros and 15% in other cities
4.75 to ESI
and gratuity is calculated as per norms in the org.
spl allowances does not ve any particular % mostly medicine domicilary, conveyance, LTA etc comes under tis.
Hope tis is clear enough.
Regards,
Pradeep
31st January 2008 From India, Madras
Kindly think from the way of Employee.We are thinking in the way of Employer,By laws employer have to provide some facilities,also to save their money employer shows amount in CTC15000 CTC gives 10000 take home, is this affordable now a days?Thanks & Ragards,Bhavesh
7th October 2008 From India, Mumbai
the employee is concerned about take home salary(and other benefits) before joining,but he is nothing to do with what the organization will spend on his training or such other matters.Hence whenever company is hiring,ctc is working just to attract employees towards them.
21st September 2009 From Saudi Arabia
Kindly let me know whether the CTC includes Employer's contribution and Employee's contribution of ESI amount. Because I have seen that some of the companies includes ESI amount (Both Parties contribution) in the CTC.
Leena
1st February 2010 From India, Madras
hello all...
I m also having a confusion...... is it necessary to fix an amount (% age ) of bonus to be given to employees.
As in my office there is no such HR dept. and whenever a new employee joins, he ask for the breakup of CTC but my account manager refused to provide the breakup as his plea is ... whats the need of breakup? just tell him the net take home salary and ask him that he will be provided the other benefits as per the rules... he said that we cant announce Bonus in advance and at the time of bonus if it should be less than we have to pay him and if it should be more than we cant deduct from employees salary( as bonus totally depend upon the decision of our MD)........ so is it right ??????/
Regards
Archana
1st February 2010 From India, New Delhi
I fully agree with this. No company gives clarity on CTC and candidates are kept in dark which is higly unfair practice in HR. This is primarily responsibility of HR professionals. Staff is not interested in CTC formula or componant calculated by each co. which may vary from 5 to 10. What they are interested in knowing is how much they will get in hand after all deductions or net take home salary. Its like how a employer feels after they get TDS deducted cheque in hand.
I honestly appeal all HR professionals to give clear clarity on CTC and Gross salary. Can anyone guide me on
Thanks.
24th March 2010 From India, Bangalore
can anyone guide me on this as this is unfair trade practice and what I understand is CTC is not acceptable to the law
24th March 2010 From India, Bangalore
Dear All, let me know in CTC employer contribution should be 12% or 13.61% on basic??? Await replies.
27th April 2010 From China
Dear All, CTC means " all heads or components paying by the employers to employees direct or indirect monthly or annually" called annual CTC. Regards, Dileep
28th April 2010 From India, Delhi
Lets take it simply.. Simply please explain..For eg consider d job for fresher in Software Devlopment is there n he is being asked to reply on 'wat's ur expected CTC/wat CTC do u expect'
Then how he is supposed to answer based on current IT salary enviornment..? He would not think in 1st place d 'x' Rs/month as a monthly salary including all other points(coz he wudnt be knoing company incentive schemes) So if he replies 10000 expecting it as a basic(main salary without other all additions eg Psa hra etc) then how company will relate this to CTC ? or eg If he answers 1.20(0r 1.20-2.20) / per anum by considering 10000(or onwards) as basic then how tat "1.20-2.20" is cosidered as;by a company?[/B]? What company will consider 1.20-2.20/anum as, will "1.20-2.20" b considered as including everything or how(becoz then basic would go to b lesser dan wat that employee had thought as a net take home salary ie 10000)?
28th May 2010 From India, Mumbai
Hello friends,
Suppose I am drawing gross salary of Rs.23500/- p.m. and due to proposed rise in ESI ceiling to Rs.25000/-, I will be covered in ESI and I shall have to pay 1.75% my contribution and my employers' liability to my ESI contribution will be 4.75% of my gross salary.
Now suppose I am having CTC pay method in a company, do I have to pay all 6.5% of ESI contribution from my pocket only? Is not employer responsible to pay his part of contribution @ 4.75%? People say that in case of CTC system, take home salary of employee will reduce by 6.5% if he is first time covered under ESI. What is all these ? How it all works?
Can any of you friends explain me the facts ?
Thanks and regards,
Janak Soni
23rd September 2013 From India, Surat
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