Neha Varma
Officer Hr (t&d) - Hero Group
Hr & Back End Operations
Personnel Manager
Production & Operations Management, Quality
K Ranga Raju
Senior Manager-hr
+6 Others

Dear Seniors, what is the difference between gross salary, CTC, net salary and salary in hand? is there any fixed formula for calculating all parts of CTC, i.e., HRA, conveyance, Medical etc???
8th June 2011 From India, Delhi
Greeting of the Day Neha Verma & All CiteHR managers
Please follow the link
you will get answer of your all questions
8th June 2011
Dear seniors, I, also confuse about it query. this query put up on citehr one month ago. but no one proper clarify. pl.contribute your valuable knowledge about it. Bashir
9th June 2011 From India, Pune
Dear Neha,
CTC-Cost to Company-It includes every rupee company spends on emplyee-salary+allowances+statutory contributions etc everything
Gross salary-It is salary/month excluding annual benifits. Generally benefits like medical,LTA will be paid on annual basis.
Net salary=take home salary-It is the salary employee will get on monthly basis after all statutory deductions like pf,esi,pt&any other.
There is no specifice formula to calculate CTC. It is organization specific. But HRA should be min 30% of basic salary & conveyance should be min 10% of basic salary. Basic salary should be 50-60% of gross salary.
Srihari Koripalli,
Orient Cement.
9th June 2011 From India, Pune
CTC- Something that people think you have Gross- Something you think you have Net- What you actually have ..................rgrds
9th June 2011 From India, Mumbai
i agree with srihari reg definition of CTC,NET SALARY AND GROSS SALARY.
but i respectfully disagree with srihari reg 30% hra,10% COVEYENCE,BASIC SHOULD BE 50% TO 60% of gross. I would request him clarify under what act we are obligated.
Expecting your feedback.
9th June 2011 From India, Vellore
i have a question if employee salary is 15100.00/m CTC then What exactly it means either employee has to pay employer & employee contribution by their own salary or he has to pay only employee contribution towards the PF I.E 12 % ONLY .
Thanks & Regards
9th June 2011
Hi Mr. un-callable
The more typical your username is, the more humorous and to the point is your reply. I liked it. These are virtually the exact feelings that are linked with these terms. Actually CTC is your salary in the view of your neighbors and relatives , GROSS is for the satisfaction of your own ego and the CIH is for your family.
Amarjeet Singh, Ambala Cantt.
9th June 2011 From India, Mumbai
Dear Neha,
CTC (Cost to Company) : It consists of all amount spends on an employee in any manner ( Salary, Bonus, Statutory contributions, service charges, transport, LTA, Medical, etc.,) will be arrived on annula basis and converted to monthly.
Gross salary: It is a portion of Monthly salary without considering the annual benefits of medical,LTA, Bonus, etc).
Net salary & take home salary: It is the salary, an employee will get on monthly basis after all statutory deductions like pf,esi,pt&any other.
The deductions may vary from industry to industry.
9th June 2011 From India, Coimbatore
CTC means total cost management given for you (ex. Bonus, PF,ESI & other government related employers shares) indirect expenses are include in ctc.
Gross Salary means your total salary fixed for you without deductions (ex. Basic, HRA, Convey, LTA etc).
Net Salary means salary received cash in hand. after deductions of PF,ESI,Tax etc.
Suresh Babu S.P
98 94 18 04 76
9th June 2011 From India, Madras

Fixing of minimum wages:
1) the appropriate govt provide minimum wage rate for agricultural and non agricultural employment (Part I & II of sch)
2)the appropriate govt. may fix minimum piece rate, minimum time rate, minimum guaranteed time rate and overtime rate.
Fixing of minimum wage rates by hour, day and month:
minimum rates of wages may be fixed by any one or more of the following wage periods, namely:
  1. by the hour
  2. by the day
  3. by the month, or
  4. by such other larger wage period as may be prescribed;
and where such rates are fixed by the day or by the month, the manner of calculating wages for a month or for a day, as the case may be indicated.
where any wage-period have been fixed under section 4 of the Payment of wages act, 1936 minimum wages shall be fixed in accordance therewith.
10th June 2011 From India, Delhi
IF you people want exact difference between gross salary and CTC I want to add something on this. The gross salary includes only monitory benefits of the employees. But CTC includes both monitory and non monitory benefits(non monitory in the seance like car Facility, Mobile bill ...etc) of the employee.
10th June 2011 From India, Hyderabad
There is no specifice formula to calculate CTC. It is organization specific. But HRA should be min 30% of basic salary & conveyance should be min 10% of basic salary. Basic salary should be 50-60% of gross salary.
can u provide me govt. act of the above salary bifurcation of salary
because i want to convey my management to as per act.
10th June 2011 From India
This is the definition for CTC
Cost to Company can also be used to refer to the total cost that an organization is spending towards their employee including the Salary, Perks, Cost related to benefits, Cost related to hiring, Training, Retirals, Statutory Contributions etc.
10th June 2011 From India, Hyderabad
This is how gross salary is defined. Aggregate amount of wages received on a regular basis, usually weekly, bi-weekly, or monthly prior to any deductions such a federal and state taxes.
10th June 2011 From India, Hyderabad
Net salary is what you get in hand after all deductions including the loan amount you have taken from the company for car/scooter or housing loan plus all statutory deductions like It, Professional tax, Pf contribution etc.
10th June 2011 From India, Hyderabad
CTC: fixed component of you salary + variable pays( incentive ,bonus,statutory part of contribution from employer side)
Gross salary: Fixed component of salary without any deduction of PF,ESi TDS,Others.
Net salary: an amount after dedution of all statutory part.and other deduction if varies called net salary
How to give break uo to salary:
Basic = 40 to 50 % of gross salary
HRA= 40 to 50 % of Basic
MA= 1250/-
TA= 800/-
LTA= 10 to 20 % of gross salary
Special Allowance = after given breakup to all above component wat ever amount is left called. special allowance.
There is no perfect formula for CTC coz we have 2 steps that we can follow while giving break-up.
1. give break up to gross salary and then add variable pays to find out CTC.
2. you have ctc then it has been decided as per company norm dat how much percentage will be considered for gross and variable then then according to the above given formula we can give break up.
Thanks & Regards
Manisha Singh
10th June 2011 From India, Delhi
Dear Neha
1. C2C = Gross Salary + Company contribution of PF/ESI,
Some companies will add Bonus, Gratuity also.
2. Gross Salary= Basic, HRA, Medical, City Allowance. etc.
3. Net salary =Gross salary-Employee's PF/ESI, Professional Tax,
Income Tax if any
10th June 2011 From India, Hyderabad
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