Understanding CTC vs. Gross Salary in India: What Are the Key Differences and Components?

Hi!

What exactly is the difference between CTC and Gross salary, if any? Could you tell me the exact components under each in the Indian context?

Thanks.
Cheers,
Sonalika :)

Hi,

CTC refers to Cost to the Company. This is the cost that the organization incurs by providing a person with employment. It includes the person's fixed salary, statutory obligations that the employer takes care of, training and development expenses, etc.

On the other hand, gross means the salary fixed for a person, which includes all the statutory deductions and allowances.

I hope this clarification is useful to you.

Vani

Hi,

Vani is right! For example, the following is a salary breakup of an employee:

Basic: 5000 HRA: 2000 Conveyance: 800 Special allowance: 2500 GROSS SALARY: 10300

On the other hand, CTC is generally calculated on a yearly basis. If we take the above example, the CTC would be as follows:

Yearly Gross Salary: 123600 Medical Reimbursement: 5000 LTA: 5000 Membership of Associations: 1000 Credit Card Fee Reimbursement: 1000 Company PF Contribution: 7200 CTC: 142800

Hence, CTC means the total cost incurred by the company on employing someone.

Cheers :D Sandeep