1. What is Cost To Company (CTC)?

Cost To Company (CTC) represents the total amount of money a company spends on an employee in a year. It includes direct benefits (salary, allowances) and indirect benefits (PF, gratuity, insurance) provided to the employee.

2. How Does the Calculator Work?

The calculator uses the CTC formula:

Where:

• \( Basic \) — Basic salary component
• \( HRA \) — House Rent Allowance
• \( Allowances \) — Other allowances (conveyance, medical, etc.)
• \( PF \) — Provident Fund contribution
• \( Gratuity \) — Gratuity amount

Explanation: This formula calculates the total cost incurred by the company for employing an individual, including all monetary benefits and statutory contributions.

3. Importance of CTC Calculation

Details: Understanding CTC helps both employers in budgeting and employees in understanding their total compensation package. It provides a complete picture of employment costs beyond just take-home salary.

4. Using the Calculator

Tips: Enter all salary components in Indian Rupees (INR). Ensure all values are positive numbers. The calculator will sum all components to provide the total CTC.

5. Frequently Asked Questions (FAQ)

Q1: What is the difference between CTC and take-home salary?
A: CTC is the total cost to company, while take-home salary is the amount the employee receives after deductions like taxes, PF, etc.

Q2: Is PF included in CTC?
A: Yes, both employee and employer PF contributions are typically included in the CTC calculation.

Q3: What are common allowances included in CTC?
A: Common allowances include HRA, conveyance allowance, medical allowance, special allowance, and leave travel allowance.

Q4: How is gratuity calculated in CTC?
A: Gratuity is usually calculated as 15 days' salary for each completed year of service, but in CTC it's often estimated as an annual provision.

Q5: Are bonuses included in CTC?
A: Yes, performance bonuses, annual bonuses, and other variable pay components are typically included in the CTC calculation.