To get the service of selected person as soon as possible, some companies may offer such candidate to pay his / her un served notice period with his previous employer so that he could join in new company by paying amount in lieu of notice period. Under these circumstances, we should not treat this amount as part of CTC as it will be incurred by an employer prior to the joining of new employee. So it may be consider as recruitment expenses along with other expenses in general but not as CTC of such employee. It is my opinion only and I am not having any idea about this in detail.
What if we are okay with his 1 month notice period and just to make an alluring offer we are giving him a joining bonus which will be paid to him along with his 1 month salary.
Then in that case should it be a part of CTC? I just want to know what is the general trend in companies regarding this.
No. We cannot make it as part of CTC, why because certain allowances / Contribution of employer which are being payable to an employee towards his salary or wage such as PF, ESI and Gratuity are to be consider as part of CTC of an employee which are recurrent in nature. For example
A - Salary CTC Component as follows
Any other Allowance-
Employer contribution of PF
Emp.Contribution of ESI-
Exgratia / Bonus
So the expenses which is to be incurred by an employer at once that to prior to the joining of such employee could not be termed as part of CTC
Joining bonus offering reason only in case of candidate is good and compnany wants to recruit him without distrubing exsiting Structure and existing employees of organisation.
J L TRIVEDI