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Dear Shishir
That is just a calculation to calculate their Cost towards the employment of a particular employee.
But it will be due only when you leave job after completing 5 years of service.
Ravi Sauson

Dear All,

CTC is Cost To Company, which includes every cost that shall be borne w.r.t. any particular job or task, not emoluments actually received or given to employee.

Gratuity is applicable only after 5 years of service, but has to be taken into consideration while calculating cost for new opening and can be avoided if term of service is to be less than 5 years for sure.

Some companies also take various periperals like computer, office space, electricity cost and other such petty expenses to eactly figure CTC. Notional Cost are like severance pay, retrenchment benefit etc. which might happen but liability of gratuity is to rise, almost, for sure.

Mentioning CTC in Appt letter, policy adopted off-late, to lure and boast, does not mean that it is take home. Employee Should clarify what amount of take home shall actually be received during appointment itself.

Unless if, you get a salary slip, wherein the gratuity amount is deducted from Gross Salary, even labour court shall not be able to provide you the gratutity amount deducted from your CTC, for service less than 4 years 7 months. If the deduction is shown in books of accounts from the salary heads, than it is illegal as per PoWA.

You can include the gratuity after reckoning of Gross Salary only to CTC. If you leave the Orgn. before completion of 5 years (4 yrs.+240 days) of contns. service, it will not be credited to your a/c. If it is the fund following the pmnt. grty. act, 1972, it will not be credited to your A/c. If it is other grty. an employer has to give back compulsory. If you include the condition of term of service, it has to be credited subject to appr. letter term of service.
P.Sathish Kumar

Dear Anjali . . . . . If u maintain gud relationship with ur employees then u can shine like a star in our profession . . . . YOU CAN PERFORM WELL . . . . Regards, A.ANAND KUMAR
Dear All Tell me that What should be show in employee’s Appoint letter ? 1 Basic Salary 2 Gross Salary
There are some companies who will show gratueity and employer contribution to pf as part of the CTC.
Here the CTC means total cost incurred by the company to retain the employee in the organisation.
So, while negotiating the salary one must negotiate on the gross salary or based on take home salary.

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