Understanding CTC vs. Gross Salary: Can Someone Explain the Difference Clearly?

Dear All,

Can anyone please let me know the difference between CTC and gross salary in detail? It's very confusing.

Regards,
Alka

Understanding CTC and Gross Salary

CTC (Cost to Company) means every single penny spent by the company on the employee. For example, if you have a coffee in your office, the cost of it will be added to your remuneration. Similarly, transportation, gratuity, and other benefits are included. On the other hand, Gross salary includes net salary + PF.

Please refer to the attachment for more information.

Suggestion: Always negotiate your salary based on Gross rather than CTC.

Regards

Dear Alka,

CTC (Cost to Company) means every single penny spent by the company on the employee, i.e., if you even have a coffee in your office, the cost of it will be added to your remuneration. Likewise, transportation, gratuity, and other benefits are included, whereas Gross salary includes net salary + PF. Please see the attachment for reference.

Suggestion: Always negotiate your salary based on Gross rather than on CTC.

Gross Salary means: Basic + DA/HRA + Conv. PF is deducted from Gross Salary. Net Salary: Gross salary - PF, advance, etc.

MANOKAVIN

Dear Alka,

CTC means Cost to the Company, which includes all the cash benefits you receive from the company per annum (inclusive of statutory benefits). On the other hand, Gross refers to the Monthly Gross Salary, which includes your Provident Fund contributions and Professional Tax.

Thank you.

Understanding Salary Components

Gross Salary consists of all earning components, such as BASIC, HRA, DA, CCA, and other allowances.

Net Salary is Gross Salary LESS deductions, such as PF, ESIS, Professional Tax, TDS, etc.

Cost to Company (CTC) is Gross Salary PLUS contributions such as the company's contribution to PF, ESIC, Gratuity, Superannuation, medical insurance, etc., PLUS the value of perquisites, such as Car, House, and other non-cash benefits.

Regards,
Archana