Hi Satish,
CTC is actually the total Cost to Company and varies depending on an individual company's philosophy regarding compensation positioning.
Some companies do calculate the benefits given to staff under the term of CTC, while certain companies keep those separate. It depends on the company how they want to articulate it, but primarily CTC comprises of:
- Annual Base Salary: In the Indian context, the term "Base salary" is generally construed as "Basic" salary, while in the European context, there is only the Base salary and no other "cash allowances". You might like to keep this in mind while designing the structure.
- Cash Allowances (Both monthly + Annual): Includes components like HRA, Conveyance, LTA, Special Allowance, CCA, etc. There are NO mandated heads that need to be a necessary part of this.
- Annual Guaranteed Cash: Is a summation of Annual Base salary + Cash Allowances as mentioned above.
- Annual Total Cash: Is the addition of Annual Guaranteed Cash + Variable Pay/Sales Incentive/Profit Sharings.
- Annual Total Remuneration: Annual Total Cash + Non-cash benefits like Loans, Car, Petrol, maintenance, Driver, Club Membership, Housing, Insurance premium, etc.
CTC would be the sum of Annual Total Remuneration given above + retirals like Gratuity/PF/Superannuation costs added to the same.