How Do I Calculate CTC for Sales Executives with Salary and Commission in Hyderabad?

Dear All, I am not an HR professional, and I am starting a small sales business. I need to determine the Cost to Company (CTC) for my employees, but I am unsure about the calculations involved.

Monthly Fixed Salary and Commission

Monthly Fixed Salary: $10,000
Commission per closure: $5,000
Each sales executive has a monthly target of 20 leads and 5 closures.

Additional Components

We are based in Hyderabad and uncertain if additional components like HRA, DA, PF, etc., need to be included, as in the example. Any guidance would be appreciated.

To create a comprehensive Cost to Company (CTC) structure for your sales executive, considering the fixed salary and commission component, you can follow these steps:

Step 1: Calculate Fixed Salary Component
- Monthly Fixed Salary: 10,000

Step 2: Determine Commission Component
- Commission per closure: 5,000
- Monthly target: 5 closures
- Total commission per month: 5,000 x 5 = 25,000

Step 3: Calculate Total CTC
- Add the fixed salary and total commission to arrive at the CTC.
- Total CTC = Fixed Salary + Total Commission
- Total CTC = 10,000 + 25,000 = 35,000

Step 4: Consider Additional Components
- You mentioned being based in Hyderabad. Depending on the local regulations or company policy, you may need to include components like House Rent Allowance (HRA), Dearness Allowance (DA), Provident Fund (PF), etc., in the CTC calculation.
- Consult with a local HR expert or refer to the labor laws in Hyderabad to ensure compliance with statutory requirements.

Step 5: Finalize and Communicate the CTC
- Once you have calculated the CTC including all relevant components, communicate the breakdown clearly to your sales executive. It's essential to ensure transparency in the compensation structure to avoid any misunderstandings.

By following these steps and considering the specific components applicable to your location and business, you can create a CTC package that aligns with industry standards and motivates your sales team effectively.