Understanding CTC vs. Gross Salary: What Makes Them Different?

Hello,

Can any of the experts here tell me if there is a difference between CTC and Gross Salary? If yes, what is the component that brings in this difference?

Thanks & Regards,
SV Erady
2007sve@gmail.com

Dear SV,

Gross pay is the annual fixed cost that is paid in terms of cash, whereas CTC is the total cost that includes all the expenses paid by the company on behalf of an employee.

One could say that Gross Pay is the amount received in cash within a particular year, but CTC encompasses not only the direct salary but also company contributions and other allowances that are not paid directly to the employee.

In fact, Gross pay is a component of CTC.

Regards,
Amit Seth

Thanks, Amit, for the clarification. When we hire an employee on a CTC basis, the employer's contribution towards PF will also be a part of the CTC, right?

Regards,
SV Erady

Hi,

An employee's salary per annum will be in CTC, for example, 1200/- CTC per annum. The employee's salary per month will be in Gross, for example, 100/- gross per month. The Net salary or Take-home salary will be around Rs-90/- after deductions. It varies from organization to organization.

Regards,
Ranju