Understanding Variable Pay: How It Impacts Your Salary and CTC in Sales Roles

Good Evening Everyone,

I'm Aditya, working as a Sales Officer in a Chennai-based paint company. My company is deducting some amount as variable pay from my salary every month. What is meant by variable pay? How does it affect the CTC? What is the general theory to calculate that? Kindly show me a solution.

Dear Aditya,

Variable Pay is an allowance that is incorporated in the CTC sheet, and this amount is generally linked with your company's performance. There will not be a deduction every month from the salary as this is normally a yearly component and reflects in the CTC, not Gross Salary. CTC stands for Cost to Company. The figure is generally arrived based upon the past records of company's performance.

Regards,
Ashutosh Thakre