Madhu.T.K
Industrial Relations And Labour Laws
Ops115
Director, Osats, New Delhi
Satyajeetpadhee
Hr Executive
Mirza
Regional Hr Head
Sarojdeka
Hr-professional
Mailmesrikant
Hr Executive
Daisy Singh
Sr. Manager(hr)
Vinisha Wilfred
Hr Professional
SUNDER TOMER
Hr Officer
Tinwkle
Hr-officer
+7 Others

Dear Members,
What should be the components of CTC? Whether Gratuity can be a part of CTC? Also what other components can be used for CTC. My company is into Education, Websites & Entertainment located in Noida. The manpower strength is 200 approx. We are in the process of finalizing the HR policies. During salary structuring also we are facing problem . Kindly help.
Thanks & Regards,
Daisy Singh
29th March 2012 From India, Delhi
Hi Daisy,
Yes, Gratuity is part of CTC..... what is CTC means.... Cost to Company i.e. whatever the cost that is invested on an employee will be a part of CTC
hope you got the clarity.... if you still need any more clarifications you can touch base with me

29th March 2012 From Saudi Arabia, Jiddah
Dear Mirza,
Thanks for reply. Suppose the employee does not not continue his services for 5 yrs. then what will be done with the deducted amount? Also what all can be the components of CTC?
Thanks & Regards,
Daisy Singh
29th March 2012 From India, Delhi
Hi Daisy,
While making the CTC you are not deducting anything, instead you are adding the additional cost of an employee to his gross salary.Need not to worry as this is understood that Gratuity is paid only after 5 years of continuous services or else you can explain it your employee while offering them CTC. Other than gross salary you can add below components to an employee's salary
1) Employer's share of PF contribution
2) Employer's Share of ESI contribution( If applicable)
3) Any Premium paid towards Medical Insurance
4) Amount paid towards lunch
5) Amount paid towards transportation
6) performance Bonus/ yearly bonus paid.
7) Any other monitory benefit provided by an employer
Thanks
Roopa Mehra
29th March 2012 From India, Gurgaon
HI,
Suppose a employee's monthly salary or say monthly ctc is Rs 30,000,then bifurcation can be done as below :
Basic salary = 12000 (40% of 30,000)
Hra = 4,800 (40% of 12,000 for non metro & 50% of basic in case of metro)
Medical = 1,250
Conveyance = 800 (Fixed)
Special = 11,150 (30,000-basic+hra+medical+conv.)
Less : P.T = 200 (State wise differs)
PF = 780 (IF BASIC is more than 6500=6500*12%,if basic is less than 6,500=whatever basic*12% )
THE ABOVE ARE THE VARIOUS COMPONENTS OF CTC.
REGARDS.
SATYAJEET PADHEE.
30th March 2012 From India, Madras
HI,
Yup.. gratuity should not be included as a component part of CTC.Because gratuity is something paid to the employee after successful completion of 5 years in an organisation.It is paid to the employee for his loyalty towards the company and it is paid on a F&F (full and final settlement) basis on a lump sum.That is why gratuity is not included as a component part of CTC.
Regards,
SATYAJEET PADHEE
30th March 2012 From India, Madras
It is normally a gratuity given to a person having been in a company for more than Five years which is not tabulated in CTC and therefore gratuity should not be included as a component part of CTC. As gratuity is something paid to the employee after successful completion of 5 years in an organisation.It is paid to the employee for his loyalty towards the company and it is paid on a F&F (full and final settlement) basis on a lump sum.That is why gratuity is not included as a component part of CTC.
In sugar industry this is the norm.
Vasudev
31st March 2012 From India, Bangalore
Dear, Vasudev Sir, Can you tell me that how calculate gratuity after successfully completion five year. Regards Tinwkle
31st March 2012 From India, Rupnagar
Dear Twinkle,
For making more clear regarding Gratyry you can take the example of Vodafone Thank you card. It is just a compny's loyality towards the employee for the service of the employee. The calculation of gratyty is- {(15/26)*last Drawan Salary(Basic+DA))}No. Of Working Year. For more clarification u you can make touch with me on
31st March 2012 From India, Bhubaneswar
Gratuity should be included only after his service of five years in the company. The amount of the gratuity may be kept as reserve in the company till the individual employee completes five years of service therein.
31st March 2012 From India, New Delhi
Dear All ,
There is no such formula to calculate gratuity .It differs from company to company as well it depends on the policies.But one thing every body should keep in mind is that if gratuity is mentioned in the offer letter then there will be a deduction of 4.81% from the basic salary .
Regards
SATYAJEET
31st March 2012 From India, Madras
Dear Sir,
The normal procedure to calculate the gratuity is to take into account Basic salary Plus Dearness Allowance divided by 26 days this will give the salary per day and this figure is multiplied by 15 days for one year, similarly multiply for ( number of years service) five years it would be calculated.
Vasudev
31st March 2012 From India, Bangalore
hi,
to calculate grauity, the formula is
basic salary * 15 (number of days for grauity paid) / 26 (number of working days in a month) * number of years of service.
suppose Basic Salary is Rs 7000/-. To calculate :- 7000*15/26*5
31st March 2012 From India, New Delhi
Hi Dear,
Gravity is Calculated always 26days in any type of organisation.
Its Formula is:
Gravity= 15/26*How Many Completed Year*Last Basic Drawn.
Hope You Understand it.
Regards,
Lokesh Yadav
9560920941
31st March 2012 From India, Delhi
Hi,
Please do not get confused with Gross and the Total Cost to the company (CTC); when you say CTC it includes every single expense that you spend on your employee
If it is Gross, then you do not need to mention or include the Gratuity
Hope this clarifies.......
31st March 2012 From Saudi Arabia, Jiddah
Dear Tinwkle, Please find the formula to calculate Gratuity. Current Basic*15/26*No. of years worked
31st March 2012 From India, Secunderabad
Hi Daisy,
Giving due respect to every one's view mentioned above I want to add on one point that CTC ie; Cost to Company includes every single penny a company spends on its employee. In that case, Gratuity is no doubt a part of CTC. But, Gratuity is payable only after completion of 5 years of service to any employee, and those employees who attain the age of superannuation (58 years) cannot claim for Gratuity Amount. It is company's sole interest if it decides to give Gratuity Amount to this employee or not after completion of 5 consecutive years. If the employee leaves the organization before completing five years then he shall be deprived of the amount of gratuity which he can get only after completion of 5 continuous years of service in any organization.
Regards,
Vinisha Wilfred
31st March 2012 From India, Hyderabad
Dear All,
Good Morning . . . .
I like to point up some of my view points on the said topic.
Whenever we talk about CTC it may differ from CO. to Co. and place to place.
Usually following components are part of CTC.
1. Gross Salary
2. PF & ESI (if Applicable)
3. Bonus (if Applicable)
4. Medical Reimbursement
Most of the cos. are taking following components also as a part of CTC
1. Leave
2. Gratuity
3. Any Insurance Policy Premium
4. etc. . . . . .
But in our opinion the above components should not be part of CTC. As a company providing these benefits to employees as part of Retainment policy.
In addition we like to share that we are projecting on Compensation and Benefits in India. Pls. contact for more support and guidance for HR PROCESS : .
Regards . . .
SKD
1st April 2012 From India, New Delhi
What to include in CTC and what not is the prerogative of the HR Function of the company that is decided after discussions and agreement with the management. The key is how you explain the CTC to an employee while hiring. There should be clear communication about this while fixing the salary so as to avoid confusions later.

As a normal term, CTC should include all the monetary benefits given to an employee under various heads, including gratuity. Some companies do not include gratuity part in the CTC, though it is advisable to include. So, components of CTC are decided based on the objectives of the organization as to why they want to project CTC.

Some companies have developed a more expanded form in this respect called "Total Cost To Company (TCTC)" where they capture even the indirect expenses on an employee, viz; pro-rated facility expenses (share of the office premises expenses that are rentals, electricity, other consumables etc.), pro-rated value of work related electronic equipment given to an employee, pro-rated communication expenses, pro-rated expense of employee events / corporate parties, expenses against employee gifts, etc. etc. All these depend on the organizational objective as to what are they going to use this information for.

So, the first step to decide your company's CTC components may be to do a brainstorming with the leadership team and clear the objective as to why you want to introduce this concept.

MK Saseedharan
2nd April 2012 From India, Delhi
Please go through following link.
Madhu.T.K: CTC Vs BTC
Regards,
Madhu.T.K
2nd April 2012 From India, Kannur
hi, here is gratuity calculation = ((last basic)*12/365)*leave earn days leave earn = duration of stay * 21/365 duration of stay= date of exit - date of joining giriraj sharma
3rd April 2012 From Qatar, Doha
Hi Twinkle,
The Gratuity amount is calculated in two cases.
1) If the person is covered under the Payment of Gratuity Act 1971.
2) If the person is not covered under the Payment of Gratuity Act 1971.
In First Case the calculation of Gratuity amount shall be-
Last Drawn Salary (Basic + DA) * 15/26*No of years worked.
For computation of gratuity, your service period will be rounded off to the nearest full year.
For second case even I also have a doubt and would request the seniors to elaborate it.
Regards
Smita Patra
3rd April 2012 From India, Madras
Dear Sir,
If there is no deduction from employer side .so can we show nil deduction in salary slip,As my company is manufacturing industry having 50 employee's( worker and staff ) both.And if possible send me the format for the salary slip having no deduction.
Regards
Yahvi
3rd April 2012 From India, Delhi
per gratuity act, gratuity is half month wages for each completed year. Waht is meant by wages - is it basic, or basic+other fixed allowances. Most companies do not have DA
4th July 2012 From India, Bangalore
HI, Suppose a employee’s monthly salary or say monthly ctc is Rs 10,000,then bifurcation can be done as below :
22nd June 2016
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