Hi Friends, Can any one help me out in fixing/allocating the percentage in CTC regards, sangee
From India, Madras
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2From India, Madras
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Hi Sangee,
Check out the below URL, you will get much information on Cost to the company (CTC). https://www.citehr.com/search_new.ph...ponents+in+ctc For more suggestions, CiteHR friends are ready to guide you.
Regards, Saravana Executive - HR
From India, Madras
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Check out the below URL, you will get much information on Cost to the company (CTC). https://www.citehr.com/search_new.ph...ponents+in+ctc For more suggestions, CiteHR friends are ready to guide you.
Regards, Saravana Executive - HR
From India, Madras
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Hi Sangee,
Normally, the CTC allowances vary across industries. Based on the grades, each industry prepares their salary grades and CTC structure. However, it can generally be calculated as follows:
Basic - 40% or 50% of the gross (this also depends on the company's salary grades)
DA - fixed and variable
HRA - 40% or 50% of basic (depends on the type of city)
Conv - 800/- tax-exempted
Medical - 1250/- tax-exempted
LTA - based on company policy
CCA - based on company policy
Special Allow - based on company policy
Variable Pay - based on company policy
Other Allo. - based on company policy
PF - 13.61% of basic + DA
Bonus - minimum 8.33% of basic + DA (if the basic is below Rs. 2500.00 pm); if above Rs. 2500.00, then the company gives ex-gratia
Gratuity - based on basic + DA
Superannuation - based on basic + DA
Mediclaim - based on company policy
ESI - 4.75% of basic + DA
All the above criteria should be kept in mind while creating the CTC structure.
Thanks,
Amit
From India, Mumbai
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Normally, the CTC allowances vary across industries. Based on the grades, each industry prepares their salary grades and CTC structure. However, it can generally be calculated as follows:
Basic - 40% or 50% of the gross (this also depends on the company's salary grades)
DA - fixed and variable
HRA - 40% or 50% of basic (depends on the type of city)
Conv - 800/- tax-exempted
Medical - 1250/- tax-exempted
LTA - based on company policy
CCA - based on company policy
Special Allow - based on company policy
Variable Pay - based on company policy
Other Allo. - based on company policy
PF - 13.61% of basic + DA
Bonus - minimum 8.33% of basic + DA (if the basic is below Rs. 2500.00 pm); if above Rs. 2500.00, then the company gives ex-gratia
Gratuity - based on basic + DA
Superannuation - based on basic + DA
Mediclaim - based on company policy
ESI - 4.75% of basic + DA
All the above criteria should be kept in mind while creating the CTC structure.
Thanks,
Amit
From India, Mumbai
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Hi Sangee,
The contents of the salary breakup are as follows. You can prepare it according to your convenience. HRA would be 50% or 60% of the basic salary.
- Basic
- HRA
- CCA - 825/- is exempted from tax
- Other Allowances
- Mobile Reimbursement
- Medical Reimbursement of 1250/month is exempted from tax
Gross Per Month = Sum of all the above.
Gross Per Annum = 12 * Gross/Month
PF Contribution = 12% of Basic/Annum
ESI Contribution = 4.75% of Gross/Annum
Medical = The mediclaim facility provided to employees who are not covered under ESI, as the maximum ceiling for ESI is 10000/Month. Any amount exceeding this will be covered under Mediclaim or depend on company policy.
EX-Gratia/Bonus = A fixed amount as a bonus
Annual Fixed Gross Cost = Gross/Annum + Ex-gratia
Annual Total Cost = AFGC + PF + ESIC
Annual total cost is also referred to as CTC.
Apart from this, Food coupons, Holiday packages, and Furnishing items are included in their CTC.
I hope this helps clear your queries to some extent.
Regards,
Amit Seth.
From India, Ahmadabad
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The contents of the salary breakup are as follows. You can prepare it according to your convenience. HRA would be 50% or 60% of the basic salary.
- Basic
- HRA
- CCA - 825/- is exempted from tax
- Other Allowances
- Mobile Reimbursement
- Medical Reimbursement of 1250/month is exempted from tax
Gross Per Month = Sum of all the above.
Gross Per Annum = 12 * Gross/Month
PF Contribution = 12% of Basic/Annum
ESI Contribution = 4.75% of Gross/Annum
Medical = The mediclaim facility provided to employees who are not covered under ESI, as the maximum ceiling for ESI is 10000/Month. Any amount exceeding this will be covered under Mediclaim or depend on company policy.
EX-Gratia/Bonus = A fixed amount as a bonus
Annual Fixed Gross Cost = Gross/Annum + Ex-gratia
Annual Total Cost = AFGC + PF + ESIC
Annual total cost is also referred to as CTC.
Apart from this, Food coupons, Holiday packages, and Furnishing items are included in their CTC.
I hope this helps clear your queries to some extent.
Regards,
Amit Seth.
From India, Ahmadabad
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dear amit i would like to share you how you calculate the pf as 13.61%. regards jaychandran
From India, Panvel
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From India, Panvel
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Hi Jaychandran,
The distribution of 13.61% is as follows:
- Statutory rate of contribution is 12% of Basic salary
- Pay a contribution of 0.5% of the emoluments towards EDLI Scheme
- Pay administrative charges at 1.10% of emoluments towards provident fund charges and 0.01% towards EDLI Scheme
I hope it is clear to you now.
Regards,
Amit Seth
From India, Ahmadabad
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The distribution of 13.61% is as follows:
- Statutory rate of contribution is 12% of Basic salary
- Pay a contribution of 0.5% of the emoluments towards EDLI Scheme
- Pay administrative charges at 1.10% of emoluments towards provident fund charges and 0.01% towards EDLI Scheme
I hope it is clear to you now.
Regards,
Amit Seth
From India, Ahmadabad
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I have experience in one of the private sector companies, where even the cost of fuel/cost of expenses on mobiles, and all sorts of reimbursements, are also being included in CTC. In my view, CTC is fundamentally what we spend to retain a person (salary, in whatever name or subname, and the subsidies of the facilities for the employee concerned). Reimbursement of expenses is the cost incurred to get the jobs done by our employees and is not part of CTC.
Does anyone have a different perspective on this subject?
Regards,
Pradeep Bajaj
From India, Delhi
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Does anyone have a different perspective on this subject?
Regards,
Pradeep Bajaj
From India, Delhi
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Dear Pradeep,
The two different ways of calculating CTCs quoted in your post are two extremely different ways of looking at the concept of CTC. Treated as an HR term, CTC is very much what you say it is - "Fundamentally what we spend to retain a person." I believe it should continue to be kept so as it has become a normally used phrase by HR today and should not be confused with anything else.
Having said this, I think I should also mention that CTC (Cost to Company, irrespective of the resource or department applied to) is basically a finance term and literally means the Cost to a company in getting a thing done. The "thing" could begin with any of the smallest function or sub-functions in a company. For example, the cost to a bank in processing a loan will include various aspects like administrative expenses, lawyer charges, communication expenses, prospecting expenses, sales personnel expenses, consultation expenses, conveyance, and time of executives, and so on.
Similarly, in corporate finance terms, an employee is one unit of a resource (human) applied for achieving a resultant objective. Let's call this objective "X" for now. So, all the resources applied in order to achieve the "X" objective together form the CTC to the company to achieve that objective. The calculation of this varies with the finance policies followed by companies.
For example, for a Sales Executive's profile, where the job is to achieve Rs. 100,000 of sales, the cost to the company in achieving that Sales turnover will realistically include his gross remuneration + all the expenses that you mentioned in your post. And if the total CTC here becomes more than Rs. 100,000, the Human Resource (Sales Executive) is a big loss to the company and not worth investing in. In fact, to get a financially realistic value of the costs, some companies even include opportunity costs like the cost of leave (of any kind) taken, the cost of results not achieved (in comparison to a performer in his place), and so on to calculate the value of CTC.
However, as I said before, the term CTC has become more of an HR term today used in a particular context within a specified scope, and so it must be retained with a fair degree of standardization across employers everywhere.
I hope this clears your query.
Regards,
SKN
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The two different ways of calculating CTCs quoted in your post are two extremely different ways of looking at the concept of CTC. Treated as an HR term, CTC is very much what you say it is - "Fundamentally what we spend to retain a person." I believe it should continue to be kept so as it has become a normally used phrase by HR today and should not be confused with anything else.
Having said this, I think I should also mention that CTC (Cost to Company, irrespective of the resource or department applied to) is basically a finance term and literally means the Cost to a company in getting a thing done. The "thing" could begin with any of the smallest function or sub-functions in a company. For example, the cost to a bank in processing a loan will include various aspects like administrative expenses, lawyer charges, communication expenses, prospecting expenses, sales personnel expenses, consultation expenses, conveyance, and time of executives, and so on.
Similarly, in corporate finance terms, an employee is one unit of a resource (human) applied for achieving a resultant objective. Let's call this objective "X" for now. So, all the resources applied in order to achieve the "X" objective together form the CTC to the company to achieve that objective. The calculation of this varies with the finance policies followed by companies.
For example, for a Sales Executive's profile, where the job is to achieve Rs. 100,000 of sales, the cost to the company in achieving that Sales turnover will realistically include his gross remuneration + all the expenses that you mentioned in your post. And if the total CTC here becomes more than Rs. 100,000, the Human Resource (Sales Executive) is a big loss to the company and not worth investing in. In fact, to get a financially realistic value of the costs, some companies even include opportunity costs like the cost of leave (of any kind) taken, the cost of results not achieved (in comparison to a performer in his place), and so on to calculate the value of CTC.
However, as I said before, the term CTC has become more of an HR term today used in a particular context within a specified scope, and so it must be retained with a fair degree of standardization across employers everywhere.
I hope this clears your query.
Regards,
SKN
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Hi Nair,
I am greatly grateful for clarifying CTC in such detail, and in simple and lucid expression. The CTC you explained is a Corporate concern, whereas the CTC I had perceived is part of the staff work of the HR Person and concerns an employee/perspective employee as he negotiates his salary with the Company he wishes to join for work.
Regards,
Pradeep Bajaj
From India, Delhi
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I am greatly grateful for clarifying CTC in such detail, and in simple and lucid expression. The CTC you explained is a Corporate concern, whereas the CTC I had perceived is part of the staff work of the HR Person and concerns an employee/perspective employee as he negotiates his salary with the Company he wishes to join for work.
Regards,
Pradeep Bajaj
From India, Delhi
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INCLUDE WASH CTC OF EMPLOYEE.xls
Employee's Compensation Act-2009.pdf