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Dear Seniors,
I recently joined a company as HR, while preparing the offer letter the CTC includes basic,HRA,Medical allowance,Conveyance allowance,Special allowance and Performance based pay(which is paid out quarterly).My question to you'll is that should I include the performance based pay as part of CTC, while calculating Basic pay which is being calculated at 35% of CTC. Your prompt reply in this regard will be greatly appreciated. Thanks.
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Hi Harini
CTC contains
Fixed Gross Pay ( Included all the fixed allowance such as basic, HRA, Conveyance Allowance, Medical allowance etc)
Benefits (Company contributions such as ER contribution of ESI & EPF, gratuity, Bonus, Insurance etc...
Variable pay (Such as performance bonus/incentives)
Dear Harini,
If performance pay is fixed every month (but you pay quarterly) then you can include it in CTC. If it's fixed then basic pay can be set accordingly and if it's not fixed (changes every quarter) then you need to set basic excluding performance pay.
Warm regards,
Umesh Chaudhary
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