Hi,
CTC stands for "Cost to the Company".
This is calculated taking into account all the expenses beared by the company towards an emloyee like Employer contribution to PF, Gratuity, Medical Insurance etc.
In India the salary has majorly two parts one is Gross Salary ie payable to the employee directly can be Fixed or variable component. Major components of this comprise of Basic,HRA,Conveyance, Food Allowances, Performanace Allowances, Incentives linked to performance or company's performance. The other part consistes of all expenses that the employer incurs for the welfare of the employee (mentioned above, like PF,gratuity etc).
Example is mentioned below:
Basic : 120000
HRA : 96000
Conveyance : 9600
Employee contribution to PF : 12000
Medical Reimbursement : 15000
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Fixed Gross : 252600
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Performance Bonus : 18000
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Total Gross Salary : 270600
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Gratuity : 57600
Employer contribution to PF : 12000
LTA : 30000
Medical Insurance : 20000
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Cost to the Company (CTC) : 390200
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NOTE: All the numbers used above are just approximation, just to explain the logic.
Thanks,
Neeti