All statutory and non-statutory variables like Basic, DA, HRA, Allowances, Bonus, EPF (24%), Gratuity, Superannuation etc are all part of CTC. CTC is 'cost to company' and employees' total cost as a percentage of net profit becomes part of an annual budget exercise for professionally managed companies. CTC contains hidden costs and these variables are used to manipulate the figures at the time of annual increment as higher management are allocated a higher percentage of increase in their salaries. For a 8,000 Crores company, a 5% reduction in overall CTC will save Rs. 400 Crores. So this is a strategic human resource activity where CTC numbers are used for downsizing etc.