There is no definition of CTC; an employer can add any component in CTC. Employer PF & ESIC contribution can be a part of CTC, but it should not be shown in the wage register & salary slip because, as per both Acts, Employer Contribution cannot be deducted from the wages of employees. It amounts to a penal offense.
Regards
From India, Delhi
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93Regards
From India, Delhi
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Dear Sir, As your question is related part of CTC so reply Yes, but as a legal requirement PF is mandatory for all who was earing basic salary of less than Rs.6500/= per month. Thanks. G.J.Panchal
From India, Ahmadabad
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From India, Ahmadabad
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It is the trick of the employer to inflate the CTC by including the employers contribution in the CTC. pon
From India, Lucknow
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From India, Lucknow
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Understanding CTC (Cost to Company)
CTC stands for Cost to Company, which means the cost the employer incurs to employ an employee. Therefore, all the perks and reimbursements are added to the CTC to get the total figure. Hope that helps.
From India, Chandigarh
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CTC stands for Cost to Company, which means the cost the employer incurs to employ an employee. Therefore, all the perks and reimbursements are added to the CTC to get the total figure. Hope that helps.
From India, Chandigarh
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Dear abhi65, CTC (cost to the company) means any amount paid or spent on an employee by the organization. So employer contribution of EPF and ESIC are also a part of CTC. regards, Kamal
From India, Pune
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From India, Pune
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Hi,
There are three terms used in salary:
1) CTC (Cost to company, includes all the additional benefits an employer offers to an employee)
2) Gross salary (Basic + HRA + other allowances)
3) In-hand salary (After all deductions)
So it is clear that the total cost to the employer, including PF contribution, ESIC contribution, medical contribution, and any other contributions paid by the employer for the employee, makes up their CTC.
Regards,
Roopa Mehra
From India, Gurgaon
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There are three terms used in salary:
1) CTC (Cost to company, includes all the additional benefits an employer offers to an employee)
2) Gross salary (Basic + HRA + other allowances)
3) In-hand salary (After all deductions)
So it is clear that the total cost to the employer, including PF contribution, ESIC contribution, medical contribution, and any other contributions paid by the employer for the employee, makes up their CTC.
Regards,
Roopa Mehra
From India, Gurgaon
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Hi All,
I want to inform you that any costs incurred due to an employee can be included in the CTC, which stands for the total cost of an employee. This includes ESIC contribution, PF contribution, as well as any other expenses or reimbursements.
Thanks & Regards,
Sunil Sharma
V3S Group
From India, New Delhi
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I want to inform you that any costs incurred due to an employee can be included in the CTC, which stands for the total cost of an employee. This includes ESIC contribution, PF contribution, as well as any other expenses or reimbursements.
Thanks & Regards,
Sunil Sharma
V3S Group
From India, New Delhi
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Every employer used to account for expenses on employees directly in salary or indirectly, such as canteen, uniform, shoes, etc. So, the answer to your question is that the PF contribution of the employer is also a direct cost to the company, similar to gratuity, ESIC, or any mediclaim policy.
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Understanding CTC and PF Contribution
CTC is not a statutory concept. It is a business concept, and what should constitute CTC would vary from company to company. You are not going to be shot dead for including PF contribution in the CTC, nor will you be showered with petals for its exclusion.
From India, New Delhi
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CTC is not a statutory concept. It is a business concept, and what should constitute CTC would vary from company to company. You are not going to be shot dead for including PF contribution in the CTC, nor will you be showered with petals for its exclusion.
From India, New Delhi
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CTC - Cost to Company Components
- PF contribution
- ESI contribution
- Bonus contribution
- Canteen subsidies
- Phone bill allowances
- Traveling allowance
- Providing residential
- Etc.
Regards,
Shivakumar
Asst - HR
From India, Bangalore
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- PF contribution
- ESI contribution
- Bonus contribution
- Canteen subsidies
- Phone bill allowances
- Traveling allowance
- Providing residential
- Etc.
Regards,
Shivakumar
Asst - HR
From India, Bangalore
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CTC - Cost to Company Components
- PF Contribution
- ESI Contribution
- Bonus Contribution
- Canteen Subsidies
- Phone Bill Allowances
- Travel Allowance
- Providing Residential
- etc.
Regards,
Shivakumar
Asst - HR
From India, Bangalore
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- PF Contribution
- ESI Contribution
- Bonus Contribution
- Canteen Subsidies
- Phone Bill Allowances
- Travel Allowance
- Providing Residential
- etc.
Regards,
Shivakumar
Asst - HR
From India, Bangalore
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Dear Abhi, employer contribution also included in CTC.For your reference I am attaching CTC caliculation.I Hope it may be useful to you.
From India, Hyderabad
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From India, Hyderabad
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Yes. It is included in the CTC as CTC means Cost to the company. What ever the cost company pays on behalf of the employee. Hence PF Employer’s contribution is included in CTC
From India, Bangalore
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From India, Bangalore
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Please clarify - When the employer liable to pay PF contribution. When PF Act Applicable to an establishment.
From India, Hyderabad
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From India, Hyderabad
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Hi,
Nice query.
CTC is the amount that an employer pays to his/her employees in terms of money and perks. The employer's contribution to EPF adds value to your monetary compensation. It's a different thing that the employee cannot access it in hand, but upon leaving the job or retirement, it can be completely withdrawn.
With Best Regards,
ASHOK GIRI
From India, Delhi
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Nice query.
CTC is the amount that an employer pays to his/her employees in terms of money and perks. The employer's contribution to EPF adds value to your monetary compensation. It's a different thing that the employee cannot access it in hand, but upon leaving the job or retirement, it can be completely withdrawn.
With Best Regards,
ASHOK GIRI
From India, Delhi
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CTC stands for Cost to the Company. There is no clear definition of CTC, and that is the reason every employer, rather we, the HR people, include anything spent towards an employee or for the employee to retain him on a regular basis.
In the true sense, expenses like gratuity and bonus are periodical payments and contingent in nature, payable upon the happening or fulfillment of certain incidents, such as an employee staying for 5 years with the company or staying in the company for one fiscal year.
Now, the question is, what happens if this does not occur? The cost will not be borne by the employer. Since these are statutory requirements, we take the opportunity to include them in the CTC, which also reduces our tax burden to some extent.
Gratuity amounts should be kept in the gratuity fund after actuarial valuation or should be insured through LIC. How many employers do that?
In my opinion, expenses or costs payable at a given time should not be shown as part of CTC. While this may not directly contribute to non-compliance, it gives a negative impression of the company.
Take, for example, when a company provides a production bonus or incentive, they do not include it in the CTC. Then the question arises, should it be included in the list of CTC on a contingent basis?
My answer is NO. However, from the company's perspective, the company aims to fix its capital expenditure. Essentially, the concept of CTC is designed for that purpose.
From India, Calcutta
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In the true sense, expenses like gratuity and bonus are periodical payments and contingent in nature, payable upon the happening or fulfillment of certain incidents, such as an employee staying for 5 years with the company or staying in the company for one fiscal year.
Now, the question is, what happens if this does not occur? The cost will not be borne by the employer. Since these are statutory requirements, we take the opportunity to include them in the CTC, which also reduces our tax burden to some extent.
Gratuity amounts should be kept in the gratuity fund after actuarial valuation or should be insured through LIC. How many employers do that?
In my opinion, expenses or costs payable at a given time should not be shown as part of CTC. While this may not directly contribute to non-compliance, it gives a negative impression of the company.
Take, for example, when a company provides a production bonus or incentive, they do not include it in the CTC. Then the question arises, should it be included in the list of CTC on a contingent basis?
My answer is NO. However, from the company's perspective, the company aims to fix its capital expenditure. Essentially, the concept of CTC is designed for that purpose.
From India, Calcutta
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Dear Mr. Abhi Both PF (EMPLOYEE & EMPLOYER contribution) & ESIC to be included in CTC under DEDUCTIONS. With profound regards
From India, Chennai
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From India, Chennai
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Understanding CTC (Cost to Company)
CTC includes the total cost to the company for the purpose of hiring an employee. CTC is also a parameter to compare the salary the company is offering versus the prospective employee's last drawn salary. This is just to compare apples to apples. Employers may also add other components to CTC.
From India, New Delhi
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CTC includes the total cost to the company for the purpose of hiring an employee. CTC is also a parameter to compare the salary the company is offering versus the prospective employee's last drawn salary. This is just to compare apples to apples. Employers may also add other components to CTC.
From India, New Delhi
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Yes, Employer's PF contribution is part of CTC because otherwise, it would be practically impossible to compare the various components of salary like BASIC, HRA, DA, PA, etc., which actually vary from organisation to organisation. Hence, we cannot calculate the CTC in a real sense. Therefore, it would be better to consider everything that the company is providing to you, such as Air LFA, Gardener service, Bus service, Sweeper, etc., in money equivalents.
Manoj Tiwari
From India, Delhi
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Manoj Tiwari
From India, Delhi
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CTC means cost 2 company on behalf of an employee it includes both PF N ESI contributions. Regards
From India, Coimbatore
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From India, Coimbatore
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Hi All,
Employer contributions to PF should not be a part of CTC; it has become a common practice in all companies. As HR professionals, we are to blame for this practice. Employers often delegate salary negotiation to HR and rely on the HR department to design the compensation package.
Every employer looks to save money where possible, which led to the practice of including the employer's PF contribution in the CTC as a tactic to negotiate salaries with employees. This practice can result in a loss for the employee if they do not negotiate effectively. :)
Regards,
Archna
From India, Delhi
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Employer contributions to PF should not be a part of CTC; it has become a common practice in all companies. As HR professionals, we are to blame for this practice. Employers often delegate salary negotiation to HR and rely on the HR department to design the compensation package.
Every employer looks to save money where possible, which led to the practice of including the employer's PF contribution in the CTC as a tactic to negotiate salaries with employees. This practice can result in a loss for the employee if they do not negotiate effectively. :)
Regards,
Archna
From India, Delhi
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Yes, Cost to company, you are correct , PF also part of CTC, How ever part amount paid by company — — — — — — — — - regards
From Saudi Arabia, Riyadh
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From Saudi Arabia, Riyadh
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Yes, CTC - Cost to company, you are correct , PF also part of CTC, However PF part amount paid by company — — — — — — — — - regards
From Saudi Arabia, Riyadh
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From Saudi Arabia, Riyadh
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If you are member of PF, and company is contributing employer’s part of the PF contribution, than the said amount contributed by the company forms part of your CTC.
From India, Pune
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From India, Pune
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Yes, CTC (Cost to Company) is a cost incurred by the company. CTC does not have any formal manner; the only requirement is to present a high value to the employee's pay as indicated by management. There is no need to maintain any formal register, just the mimed value of CTC.
From India, Hyderabad
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From India, Hyderabad
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PF NO Contribution on CTC.pdf
CTC-Freezed PF-ESI.xls