One employee is negotiated at Gross Wages of Rs. 15000, from which PF-ESI, PT etc will be deducted. Employer will also contribute for PF-ESI and will annually pay Bonus and Leave Encashment (for PL). Suppose Rs. 2000 deducted from the salary (towards PF-ESI, PT etc), than the Net salary will Rs. 13000.
Here the Gross (15000) and Net salary (13000) are cleared.
The employer also deposit towards PF-ESI, pay annual Bonus, provide Leaves etc. These amounts are not paid to employee on monthly basis, but leads employee’s Cost to the Company. When we include such benefits to the Gross Salary that will be CTC (Cost to Company). For example the monthly amt of :-
PF-ESI = 3200
Bonus = 1250
Leave = 800
Insurance = 750
Total = 5000
In such case the CTC will be Rs. 15000 (Gross) + 5000 (employer other benefits/cost) = 20000.
Hope the matter is cleared now. Senior can suggest more views.
5th February 2019 From India, Delhi