1. The Cost to Company (CTC) is a comprehensive term that includes all the expenses an employer incurs on an employee. It comprises various components such as basic salary, allowances, bonuses, and benefits like gratuity.
2. Gratuity is a lump sum amount paid by the employer to the employee as a token of appreciation for the services rendered. It is governed by the Payment of Gratuity Act, 1972.
3. The Provident Fund (PF) is a social security scheme that helps employees save a part of their salary for retirement. Both the employer and employee contribute a certain percentage of the employee's basic salary towards the PF. The Employees' Provident Fund Organisation (EPFO) manages the PF in India.
4. The Employee State Insurance Corporation (ESIC) is a self-financing social security and health insurance scheme for Indian workers. It provides medical and cash benefits to employees and their dependents in case of sickness, maternity, and employment injury. ESIC deductions are made on a monthly basis from the employee's salary.
5. It is essential for employees to understand the CTC structure, including gratuity, PF, and ESIC deductions, to make informed decisions about their finances and benefits. Employers should also ensure transparency and clarity in communicating these components to their employees.