CTC Calculation Explained
There are certain additions and deductions made to get the net pay. It is as follows: let the basic salary be $4000. The P.F. deduction is 12 percent of the basic, which equals 12% * $4000 = $480. D.A. is added; suppose it is 25% of the basic, which equals $1000. Let there be certain allowances that amount to around $4000 (traveling allowance, mobile expense, tiffin, education, etc.). Thus, the net pay will be $4000 - $480 + $1000 + $4000 = $8520, and the CTC will be without any deductions. Therefore, it will be $4000 + $4000 + $1000 = $9000 * 12 = $108000 CTC.
Hope this helps.
From India, Delhi
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There are certain additions and deductions made to get the net pay. It is as follows: let the basic salary be $4000. The P.F. deduction is 12 percent of the basic, which equals 12% * $4000 = $480. D.A. is added; suppose it is 25% of the basic, which equals $1000. Let there be certain allowances that amount to around $4000 (traveling allowance, mobile expense, tiffin, education, etc.). Thus, the net pay will be $4000 - $480 + $1000 + $4000 = $8520, and the CTC will be without any deductions. Therefore, it will be $4000 + $4000 + $1000 = $9000 * 12 = $108000 CTC.
Hope this helps.
From India, Delhi
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how we will calculate of CTC HRA how many % we can give,CONVINCE how many % we can give,etc..?plz tell me
From India, Bahadurgarh
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From India, Bahadurgarh
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The CTC for Various Levels:
Cadre from Asst's/Sr. Asst's/Jr. Exec/Sr. Executives/Jr. Managers:
- Gross Salary + Company's Contribution to PF & ESI
Cadre from Asst. Manager to Manager:
- Gross Salary + Company's Contribution to PF & ESI + Bonus + Retirals (Gratuity) + Insurance Coverage (Mediclaim) + Incentives paid if any
Cadres from Sr. Managers and above:
- Gross Salary + Company's Contribution to PF + Retirals (Gratuity) + Insurance Premium + Incentives + Perquisites like Leased Accommodation provided by the company or Company's owned Accommodation provided + Car with Driver's Salary + Helper's Salary Reimbursement + Petrol Reimbursement, etc.
If you want further clarifications, please feel free to contact me on my mobile No. [Phone Number Removed For Privacy Reasons] or via my email ID [Email Removed For Privacy Reasons]. Please provide your comments on this post.
From India, Eluru
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1Cadre from Asst's/Sr. Asst's/Jr. Exec/Sr. Executives/Jr. Managers:
- Gross Salary + Company's Contribution to PF & ESI
Cadre from Asst. Manager to Manager:
- Gross Salary + Company's Contribution to PF & ESI + Bonus + Retirals (Gratuity) + Insurance Coverage (Mediclaim) + Incentives paid if any
Cadres from Sr. Managers and above:
- Gross Salary + Company's Contribution to PF + Retirals (Gratuity) + Insurance Premium + Incentives + Perquisites like Leased Accommodation provided by the company or Company's owned Accommodation provided + Car with Driver's Salary + Helper's Salary Reimbursement + Petrol Reimbursement, etc.
If you want further clarifications, please feel free to contact me on my mobile No. [Phone Number Removed For Privacy Reasons] or via my email ID [Email Removed For Privacy Reasons]. Please provide your comments on this post.
From India, Eluru
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Dear Mr. Manjeet,
The Conveyance Allowance of Rs. 800 per month is exempt from income tax, and tax can be saved on House Rent Allowance (HRA) if it is set at 40% of the basic salary. The company can provide additional allowances, but any excess beyond these limits will be taxable as other allowances.
From India, Delhi
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The Conveyance Allowance of Rs. 800 per month is exempt from income tax, and tax can be saved on House Rent Allowance (HRA) if it is set at 40% of the basic salary. The company can provide additional allowances, but any excess beyond these limits will be taxable as other allowances.
From India, Delhi
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I think it is cumulation of everything. Remember the old saying " Nothing comes for free " the HR policies of all cos follow the same.
From India, Mumbai
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From India, Mumbai
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The Cost to Company (CTC) includes all that the company pays to the employee. Take the total of basic salary, DA, HRA, other allowances, PF contribution of both employers & employees, and deduct the total of all deductions like the profession tax, ESIC, etc. The net amount multiplied by 12 will give you the CTC.
Regards,
Trupti
From India, Mumbai
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Regards,
Trupti
From India, Mumbai
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Understanding Cost To Company (CTC)
Cost To Company, commonly referred to as CTC, is calculated based on an employer's expenditure for acquiring general official or professional services rendered, as mutually agreed upon between the employer and the employee. This category includes:
- Basic salary/pay
- Dearness Allowance (DA)
- Variable Dearness Allowance (VDA)
- House Rent Allowance (HRA)
- Conveyance Allowance
- Educational Allowance
- Uniform Allowance (including washing allowance)
- Refreshment Allowance
- Medical or medicine expenses
- Employee Provident Fund (EPF) (Employer's contribution of 12%)
- Any other expenses in accordance with the organization's policies
The calculation is done either on a monthly or annual basis.
From India, Pune
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Cost To Company, commonly referred to as CTC, is calculated based on an employer's expenditure for acquiring general official or professional services rendered, as mutually agreed upon between the employer and the employee. This category includes:
- Basic salary/pay
- Dearness Allowance (DA)
- Variable Dearness Allowance (VDA)
- House Rent Allowance (HRA)
- Conveyance Allowance
- Educational Allowance
- Uniform Allowance (including washing allowance)
- Refreshment Allowance
- Medical or medicine expenses
- Employee Provident Fund (EPF) (Employer's contribution of 12%)
- Any other expenses in accordance with the organization's policies
The calculation is done either on a monthly or annual basis.
From India, Pune
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Understanding Cost to Company (CTC)
Cost to company means the total expense incurred by the company to manage one employee. The position doesn't matter when calculating the CTC of an employee, as it may vary from person to person and position to position.
For calculating CTC, consider all direct and indirect costs that the company incurs to manage one employee. This includes salary, PF, ESI, Mediclaim, PA (if the company provides), expenses, perks, perquisites, incentives, bonus, etc. Divide these costs by individual sales.
Regards
From India, Ahmadabad
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Cost to company means the total expense incurred by the company to manage one employee. The position doesn't matter when calculating the CTC of an employee, as it may vary from person to person and position to position.
For calculating CTC, consider all direct and indirect costs that the company incurs to manage one employee. This includes salary, PF, ESI, Mediclaim, PA (if the company provides), expenses, perks, perquisites, incentives, bonus, etc. Divide these costs by individual sales.
Regards
From India, Ahmadabad
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Understanding CTC Calculation
CTC calculation includes everything that is given to the employee by the employer, as the long form itself is self-explanatory, Cost to Company. Gross salary (Basic salary + HRA + conveyance + medical + LTA + other allowances, this includes all employee PF contribution, ESI contribution, P.T.), Employer PF, ESI contribution, yearly bonus, mediclaim, accidental (it should also be included as it's a cost to the company), mobile allowance (monthly), net allowance (monthly). Anything that is included as a cost to the company towards the employee should come under CTC.
Thanks.
From India, Pune
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CTC calculation includes everything that is given to the employee by the employer, as the long form itself is self-explanatory, Cost to Company. Gross salary (Basic salary + HRA + conveyance + medical + LTA + other allowances, this includes all employee PF contribution, ESI contribution, P.T.), Employer PF, ESI contribution, yearly bonus, mediclaim, accidental (it should also be included as it's a cost to the company), mobile allowance (monthly), net allowance (monthly). Anything that is included as a cost to the company towards the employee should come under CTC.
Thanks.
From India, Pune
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Designing a CTC for Senior Management in the Hospitality Industry
I want to design a CTC of 6 lakh rupees for a senior management professional in our hospitality industry and include incentives in addition to the basic salary. Kindly provide me with some insights on structuring this salary package. Your prompt assistance is greatly appreciated.
Thanks & Regards,
Gaurav Agarwal
[Phone Number Removed For Privacy Reasons]
From India, Mumbai
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I want to design a CTC of 6 lakh rupees for a senior management professional in our hospitality industry and include incentives in addition to the basic salary. Kindly provide me with some insights on structuring this salary package. Your prompt assistance is greatly appreciated.
Thanks & Regards,
Gaurav Agarwal
[Phone Number Removed For Privacy Reasons]
From India, Mumbai
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Basic: 4000.00
VDA: 1307.00 [Generally fixed in the hotel industry]
Others: 5000.00
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Gross salary: 10307.00
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PF + 637.00 [Basic + VDA * 12/100]
ESI + 490.00 [4.75% on Gross - Employer contribution]
LTA + 333.00 [8.33% on Basic]
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CTC: 11767.00
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"Correct me if I'm wrong. Hope somehow it helps you."
If you have any further questions or need clarification, feel free to ask.
From India, Bangalore
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VDA: 1307.00 [Generally fixed in the hotel industry]
Others: 5000.00
-----------
Gross salary: 10307.00
-----------
PF + 637.00 [Basic + VDA * 12/100]
ESI + 490.00 [4.75% on Gross - Employer contribution]
LTA + 333.00 [8.33% on Basic]
------------
CTC: 11767.00
------------
"Correct me if I'm wrong. Hope somehow it helps you."
If you have any further questions or need clarification, feel free to ask.
From India, Bangalore
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Salary Structure Components
The salary structure varies from company to company based on their C&B policies. Some of the basic pay heads used are:
• Basic: 35% - 50% of Gross
• HRA: 40% of Basic for Non-metro & 50% of Basic for Metro
• Con: Max Rs. 800 per month, which is a maximum of Rs. 9600 per annum
• Medical Reim: Max Rs. 1250 per month, which can be a maximum of Rs. 15000 per annum
• Spl Allow: The balance of Gross will be provided as Special Allowance
Statutory Contributions
1) PF
- Employee Contribution: 12% on Basic
- Employer Contribution: 13.61% on Basic
2) ESI
- Applicable to employees whose Gross Salary is less than or equal to Rs. 10,000
- Employee Contribution: 1.75% on Gross
- Employer Contribution: 4.75% on Gross
PT: It varies from state to state
Net Salary = Gross - PF (Employee Contribution) - ESI (Employee Contribution) - PT
CTC = Gross + PF (Employer Contribution) - ESI (Employer Contribution)
From India, Delhi
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The salary structure varies from company to company based on their C&B policies. Some of the basic pay heads used are:
• Basic: 35% - 50% of Gross
• HRA: 40% of Basic for Non-metro & 50% of Basic for Metro
• Con: Max Rs. 800 per month, which is a maximum of Rs. 9600 per annum
• Medical Reim: Max Rs. 1250 per month, which can be a maximum of Rs. 15000 per annum
• Spl Allow: The balance of Gross will be provided as Special Allowance
Statutory Contributions
1) PF
- Employee Contribution: 12% on Basic
- Employer Contribution: 13.61% on Basic
2) ESI
- Applicable to employees whose Gross Salary is less than or equal to Rs. 10,000
- Employee Contribution: 1.75% on Gross
- Employer Contribution: 4.75% on Gross
PT: It varies from state to state
Net Salary = Gross - PF (Employee Contribution) - ESI (Employee Contribution) - PT
CTC = Gross + PF (Employer Contribution) - ESI (Employer Contribution)
From India, Delhi
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Hi Guys, I need experts' comments on my issue: When PF (both Employer & Employee's) contribution is part of CTC, do we need to reduce the basic as per the number of working days present? If yes, then the employee's CTC will be less than what was committed. Please share your views.
The employee gets an additional amount of LE (Leave Encashment), so the amount should first get deducted against the LE when he/she is absent, and then the basic should be adjusted. Your comments and views are highly appreciated.
From India, Delhi
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The employee gets an additional amount of LE (Leave Encashment), so the amount should first get deducted against the LE when he/she is absent, and then the basic should be adjusted. Your comments and views are highly appreciated.
From India, Delhi
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Salary structure CTC 15000.xlsx
Salary calculation.doc