Struggling with High Deductions in CTC? Seeking Advice on Reducing Employee Costs

Hi, This is David Here. My company calculates CTC for hiring candidates and considers Bonus and Gratuity in the employer's list, and then provides the gross salary. This often leads to heavy deductions for employees working under a lower pay scale. Can anyone suggest how to reduce deductions in CTC and provide me with a breakdown?

At best, gratuity deduction can be called a deduction if such an employee quits before completing 5 years of service. Bonus is deducted per month is paid annually, so this arrangement is OK. You may negotiate for a refund of the gratuity cost in case you don't complete 5 years of service. It is unlikely that the employer may agree, but this is the only way to protect the deducted gratuity sum before joining. If the employer agrees, get the same in writing somewhere.

Understanding CTC and Its Components

1. CTC stands for Cost to the Company. This calculation is done by all companies as they need to determine the cost of each employee.

2. Every candidate hired is provided with complete details. When accepting the offer, the candidate checks every detail of the offer.

3. Bonuses are paid annually by the employer and are considered a cost to the company. Bonuses do not form part of the gross salary. Similarly, gratuity is a terminal benefit that employees receive when eligible. Companies need to make provisions for funds under all these categories.

4. In every job offer, there is always a section for the monthly gross salary that the employee can review. This information is crucial for calculating the monthly take-home salary after statutory deductions. These details are usually outlined in the offer letter. Some employers attach complete details along with the offer letter. It is important for individuals to understand these details, and if there are any doubts, they should be clarified before accepting the offer.