Transitioning from Defense to Corporate: How Do I Calculate My True CTC with Benefits?

Hi friends,

I am new to the forum. I am serving in Defense and planning to transition to the corporate sector. I find it challenging to calculate my annual CTC. I would like to know whether it is based solely on my salary statement or if I should also include other benefits such as free medical facilities, accommodation, ration, clothing, bonuses, gratuity, leave travel benefits, pension, insurance, etc. If yes, how can we calculate the monetary value of the intangibles and facilities we receive in the armed forces? I hope to receive a detailed response on this subject from everyone.

Thank you, Ramesh.

I would like to inform you that you should not only count CTC as per your salary statement but should also include other benefits like free medical facilities (with the premium paid by the organization), accommodation, ration, clothing, bonus, leave travel benefits, transportation facilities, and telecommunication facilities (if your mobile and residential phone bills are paid by the organization). After five years of service, you can also count Gratuity.

Hi, most of the private companies have now removed intangibles income as it comes under FBT. In the private sector, it's mostly divided into the following parts: Basic - 40% of CTC, Conveyance - 800 pm, PF - 12% of basic, Medical - 15000 p.a., LTA - 12000 p.a., Variable & Personal pay - if applicable.

But companies also have one account for Reimbursement, for example, telephone (call bills), transfer bills, relocation bills, hospital insurance, pension plans, sick leave, business travel trip, awards, performance incentives, bonus, etc.

Dear All Members of the forum,

I have joined a company that calculates my salary on a CTC basis. In my CTC, they are including gratuity, which is then deducted from my overall CTC. Is this practice right or wrong? Please guide me.

Thanks a lot,
Amit Kumar Garg

Hi,

As the name suggests, all expenses incurred on behalf of the employee by the company form part of the CTC. The typical components of CTC are:

1. Basic
2. HRA and all other allowances (Conveyance, Dearness, special, etc.)
3. PF and Gratuity payable by the company.
4. Insurance payable by the company.
5. Canteen/Uniform, etc.

Hope this clarifies.

CTC may include:
Basic + HRA + Medical Allowance + LTA (depends on company policy) + Bonus + P.F Contribution (by company) + ESIC contribution (by company) + Travelling Allowances + CCA

K. Shaikh

Hi Monika,

The term CTC means cost to the company. Whatever company is incurring on u comes in CTC.Total compensation includes the value of all the perks and benefits one gets from the Company in addition to ones salary.

Following are the components which comes in CTC.

FIXED SALARY

Basic Salary



House Rent Allowance



Company Leased Accomodation



City Compensatory Allowance



Special Allowance



Conveyance Allowance



REIMBURSEMENTS

MEAL COUPONS



Entertainment



Books/Periodicals



Education

House Maintenance Allowance



Furnishing Allowance



Dress/Uniform Allowance



Other Allowances



BENEFITS/ PERKS

Company car

Driver's Salary

Maintenance and Petrol Expenses

Leave Travel Allowance



Canteen Subsidy



Telephone Expenses



Mobile Phone



Club Membership



Electricity/Gas



Servant/Gardener



Credit Cards



Furnishings/Durables



Holiday Facilities



Medical Reimbursements



Medical Insurance

RETIRALS



Provident Fund



Superannuation



Gratuity

BONUS



Fixed Bonus

Productivity Linked Variable Bonus(*)



Any Other Performance Oriented Incentive including Stock Option Plan(*)

The above mentioned components comes in CTC.

KATYANA

Hi all,

I am new to this forum and it's a very informative site! I am working as an HR executive in a startup recruitment consultancy. I need some inputs on the topics listed below. Can anyone help me out please?

- What is the salary structure (Basic and Incentive structure) for business developers in a recruitment consultancy?
- What could be the leave policy for a startup consultancy?

Thanks in advance!

The concept of showing the salary of an employee in the form of CTC (Cost To Company) is a new style idea developed by companies to attract employees. Since the CTC includes all costs to be incurred by employing a person, projecting the employment to a period coming after 5 years in addition to the actual remuneration payable every month, the amount offered will be significant. This is just to attract employees. I have come across a salary structure with medical reimbursement made a part of CTC. The poor employee expected the same also as receivable every month, but he was denied it, saying adequate proof is not given for having spent the amount. Similarly, for many, the meaning of Gratuity is not aware. They feel that they will get it every month! They do not know the gratuity is payable only after they complete 5 years with the employer.

Therefore, do not believe in the CTC concept. When accepting a job, think whether the monthly salary alone is acceptable or not. Do not take the CTC since there is nowhere mentioned about BTC (Benefit To the Company by employing a person - in fact, if there is a cost involved, there should be a benefit also!).

Regards,

Madhu.T.K

Hi friends,

It is a simple topic, but still a confusing one, I think. Anyways, our friend Amit has got the solution for his problem. Amit, what all have you told is correct. Gratuity is part of CTC, as the name suggests Cost To Company, i.e., the total cost that the company will incur on you. I hope many of our friends have got this clarified.

Regards,
Amith R.

Hi,

Please find attached the SALARY BREAKUP FOR BUSINESS DEVELOPMENT MANAGER IN RECRUITMENT CONSULTANCY.

According to the Shops and Establishment Act, a maximum of 12 CL or SL CAN BE GIVEN IN A CALENDAR YEAR - (MEANS - 1ST JAN - 31ST DEC) + 10 PUBLIC HOLIDAYS (INCLUDING NATIONAL HOLIDAYS AND FESTIVALS). Referring to this, you can prepare your leave policy. For further clarification, drop me an email.

KATYANA

Hi All,

I am currently working on a restructuring project for a company. Could I please get a sample of a compensation structure for all levels within an organization?

Thanks,
Forty4

Hi Friends,

I am planning to restructure my employees' salary structure from next month (April). Can anybody help me do it the best way for both the employee and the company? How much percentage of the total salary can be given as reimbursements? What are the possible reimbursements for which employees can provide bills and get tax exemption? What will be the FBT on these components?

Right now we have Car petrol, Car maintenance, driver salary, electricity, and telephone reimbursement as per actuals. Other reimbursements like entertainment, books & periodicals, office attire, and medical are included with the salary, and bills would be collected at the end of the year.

Can I add more heads? Do those heads have any limits? What are their FBT rates? Help me.......

Regards,
N S

Hi,

Thanks for the inputs. However, in defense, calculating the monetary equivalent of these benefits is quite difficult. When preparing the CTC, the value of these benefits is hard to estimate since the monetary value of these benefits is never highlighted anywhere by the organization. I hope someone with a clearer view of the defense setup can provide more insights.

Regards,
Ramesh