Is My Husband's Salary Package Really What Was Promised? Seeking Clarity on CTC and Benefits

Hi,

Recently, it was discovered by my husband that he is being paid less than 2 lacs of what he was promised and what is shown in the paperwork. We came to know about this during a scrutiny conducted by one of the credit card companies.

As a result, a few doubts have arisen in my mind:

1. What is CTC?
2. If I am told that my package will be, say, 5 lacs per annum, then is that amount inclusive of the gross and the annual benefits?
3. If the Employer PF contribution should be 12% of the basic salary, what should be shown in the annual salary (only the PF contribution or the pension contribution as well)?

I would greatly appreciate it if I could receive clarification on these matters.

Thank you to the community in advance.

Regards

CTC stands for Cost To Company, which represents the total amount the company would spend annually on the employee. It includes the gross income along with all allowances and benefits. The salary break-up sheet provides a clearer picture of the net income or take-home pay.

All reimbursements must be claimed separately and are not reflected in the salary slip for tax purposes. The salary slip also includes deductions from the net income, giving you an overview of the total deductions made.

Hi Vinod,

It's true that here all HR professionals interact. Everyone is learning, trying to gain from this group. If you can share your understanding on this topic, it would be great for all of us.

Thanks and Regards,
Anuradha Singh

Hi Vinod,

I am surprised to see such emails. I hope that the members of this community are HR professionals and they should know the meaning of CTC. If HR professionals themselves are unaware of the CTC, God should help the profession.

Regards,
Vinod Bidwaik

Vinod,

One becomes a professional after much experience and learning. All of us start from scratch and build our knowledge. Every field has its own ABCs which we must learn to proceed towards the so-called 'professional' status.

If we at Cite HR do not encourage and welcome doubts and queries, however simple they might be, we would be unfit to be called members of the HR fraternity. Knowledge is all about sharing.

If a non-HR person feels his/her doubts can be cleared by members of this site, we should take it up to help him/her. This might encourage them to enhance their knowledge in HR.

And yeah, please don't forget that there was a time when even you wouldn't have been aware of this simple term 'CTC'. If we keep our questions to ourselves thinking how childish they are, we would never be able to succeed.

I request you and other similarly minded people not to dissuade members from sharing their doubts/queries. We are all here to help each other grow.

Cheers

Hi,

I am Mudra, and I had posted the query yesterday. With the replies, I understand that the assumption has arisen that I am an HR professional and do not know what CTC is. I am an IT professional and am aware of what CTC is. But, as you can see, my hope was to clear up the ambiguity I am currently facing.

I appreciate it if the community does not assume anything from another member's queries and relies on the knowledge base. Instead, a free discussion on the topic (no matter how small or big) would be more helpful for many of us, including HR and non-HR members.

In any case, thanks for the replies.

Regards,
Mudra

Hi Mudra,

Believe me, you have come to the right place for your queries. I totally agree with you that what is more important is the knowledge pool.

Kindly let me know if my earlier post was of some use. I tried to answer two of the questions. I'm not very sure about the third; I could try and get back to you after some research or let other senior members in the forum take charge.

Keep up your spirits. God Bless.

Hi Mudra,

Let me try answering your query.

Now, if we go step by step,

CTC = Cost to Company. This includes each and every penny that the company spends on you. It may not be direct cash in your hand, but some benefits like a meal one time a day, some insurance policies, PF, conveyance (if the company provides you some cab or bus facility), etc.

So, assuming that now, the components of your CTC would be,

Basic A

HRA B

HMA C

CCA D

Prof. E

Ent. F

Medical G

LTA H

So, your GROSS = (A+B+C+D+E+F+G+H)

Other benefits PF = I (12% of your basic)

Some insurance policy = J (If applicable)

Meal facility = K (If applicable)

Conveyance = L (If applicable)

So, now your CTC would be

CTC = GROSS + Benefits

= (A+B+C+D+E+F+G+H) (I+J+K+L)

But if you check now, the liquid cash in hand for you is GROSS (A+B+C+D+E+F+G+H) might be with some deductions in it according to your company policy. But, though you are not getting Benefits (I+J+K+L) as cash in hand, you are enjoying the fruit of it by availing meal facility and cab facility and stuff. That means your company is investing this amount in you and for you. So, any organization would add it to the individual's CTC. I am sure that your deductions would be the same, i.e., benefits and statutory.

I hope that this explanation would be sufficient. In case it is still not clear, try asking your HR professional, or else you could mail me your break-up so that I would be able to explain it even more clearly.

Regards,

Kiran.

Hi Samaira, Kiran,

Thank you very much for the information. Yes, your explanation clarifies my doubt to a great extent. And now I need to sort things out with my employer.

Regards, Aruna

Hello All,

Thanks to each and everyone who appreciated me. If we talk about PATIENCE, that is the KEY for an HR professional, right? :)

Mudra, I am glad that my response answered your query.

Regards,
Kiran.

HMA = Home Maintenance Allowance CCA = City Compensatory Allowance HRA = House Rent Allowance Prof. = Professional Development LTA = Leave Travel Allowance Ent. = Entertainment Allowance

Hope this clarifies the confusion.

Regards, Kiran.