Understanding CTC: Are Both Employee and Employer ESI Contributions Included in My Salary?

Dear Friends,

Some companies follow a salary structure that includes CTC, which comprises PF with contributions from both the employee and the employer.

Regarding ESI, the employee contribution is 1.75%, and the employer contribution is 4.75%, with the employee's portion deducted from their salary.

Does CTC encompass ESI employee and employer contributions as well? Could you please clarify whether both contribution amounts are deducted from the employee, or only the ESI employee contribution (1.75%) is deducted from their salary?

With Regards,

B. Sreenivasa Rao

Since CTC stands for Cost To Company, all costs relevant to the employee will be included in it. Therefore, the CTC of an ESI-covered employee will include 4.75% of the employer's share of ESI contribution as well.

Regards,
Madhu.T.K

Dear Mr. Srinivasa Rao,

As indicated by Mr. Madhu, CTC stands for Cost to Company. In other words, all the amounts spent by the employer in respect of the particular employee will be included as part of CTC. However, it will certainly not reflect the employee's contribution of PF (12%) and ESI contribution (1.75%).

CTC will also include contributions by the employer towards Gratuity, Superannuation, Leave encashment schemes, and Welfare (such as tea, coffee, subsidised lunch, uniforms, shoes, etc.).

I trust the matter is clear.

M.V. Kannan

Hi friends, please tell me, if my CTC is Rs. 2,00,000, what will be my basic salary, HRA, DA, other allowances, and other deductions? Please also provide the percentage breakdown and send me a format for this.

With regards,
R. Subhasri.