Confused About Naming a One-Time Salary Increment in CTC – Any Suggestions?

A candidate has been selected and has been offered a fixed one-time increment of 0.5 lacs after one year. This is only a one-time affair; thereafter, the employee will be appraised annually on performance and accordingly will be given an increment.

I am confused as to what to call the one-time salary increment of 0.5 lacs as I need to add it as a component in the candidate's CTC.

As the candidate is going to receive an increment after completing one year, you cannot mention it in the current CTC. However, you can include it as one of the clauses in the appointment letter.

There are two things:

1. One is salary, which is fixed at the time of joining. There is no fixed time for increments.

2. Annual increment is further divided into two parts:
i. Increment is given to compensate for the market rate due to changes in the price index to maintain balance. There would be no increment if there is price stagnation.
ii. Increment is given based on one's performance by the management.

You can refer to 0.5 as salary if the entire amount is payable at the end of the month or as CTC if there are other components in the package of 0.5 lacs.

Hi Hemantarora1,

You can refer to it as ex-gratia or a performance bonus. You need to discuss this with your management to have it included in the appointment letter.