Understanding CTC vs. Gross Salary: Can Someone Explain the Key Differences?

Hi,

Please tell me what the difference is between CTC and gross salary.

Please reply.

Hi, I am Ramya. I hope this will be useful to you!

CTC (Cost to Company) is the total of all prerequisites and fringe benefits that an employee receives from the company, including their salary. It encompasses the sum of Gross Salary, Bonus, Prerequisites, and other benefits. Gross Salary comprises the basic pay and allowances such as cell phone, travel, and entertainment. The overall gross salary is a component of CTC.

An addition to ramyasravanthi's answer...

Gross salary includes non-changeable components, while CTC includes changeable as well as non-changeable components.

Dear Lokesh,

As per my knowledge, Gross Salary is the amount before deductions, and it includes: Take-home salary + employee's share of PF and ESI contribution (as applicable).

CTC is the total cost which an organization spends on an employee. Therefore, in Gross salary, we have to add the organization's share of PF, ESI, bonus, and other allowances like LTA/Med, etc.

Somebody please correct me if this is not correct.

Thank you.

Hi,

I want to know the formula for calculating increments. Increments are usually calculated in percentages, but they can be in gross or net of CTC (Cost to Company).

Thank you.

Dear friends,

I agree with Vivek; CTC, i.e., Cost to Company, includes all the expenditures incurred by the company over its employees.

Regards,
KIRAN KALE.