Understanding CTC (Cost to Company)
CTC is the term used to denote the overall package an employer is going to offer you. This includes everything from salary to benefits and perks.
Usual components include basic salary, medical benefits, vehicle and/or maintenance, telephone expenses, company's contribution to Provident Fund, Gratuity and Superannuation, group insurance schemes, leave travel benefits, incentives and bonuses, gifts during festivals, other annual/periodic payments if any, etc.
Salary as a Percentage of CTC
Salary as a percentage of CTC is difficult to generalize. It depends on the components that make up the CTC as provided by a company. Even a lower CTC might mean a higher take-home pay than an offer with a higher CTC if the other components are arranged differently. Similarly, you cannot blindly infer that with an increase in salary and position, your pay as a percentage of salary will increase/decrease. You have to assess each offer separately.
Evaluating CTC Offers
Indian companies usually talk in terms of CTC as the figures look more impressive. But often they may mislead a candidate. You need to carefully look at their offer and calculate yourself how much your take-home pay will be. After all, all deductions are based on fixed percentages, and you can easily arrive at a close figure. Even the company will guide you on this. Sometimes, even a lower take-home pay may be beneficial if the other payments are made against vouchers/bills (e.g., telephones, cars, refreshment, etc.). This will ultimately lower your tax liability. Hence, you should look at both CTC as well as take-home pay while negotiating. Don't use only one of the two to negotiate.
Additional Considerations
You also have to look at certain other criteria like work timings, number of holidays, employee-centric schemes for further education, etc. You can't put a monetary value on these things, but obviously, you shouldn't ignore them as well.
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