What is Full Form of CTC:-

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CTC : Cost To Company

Cost To Company:(CTC)-

It is a whole salary package of employees that spends by companies in a year. It is a total spending of companies on their employees in a financial year. Nowadays all companies give salary to their employees in cost to company format. CTC is calculated by adding many things and bonuses of employees. It is not a actual salary of employees.

Cost to company includes various other benefits like medical insurance, house rent, conveyance allowance, dearness allowance etc. So after adding your basic salary and all these expenses made by your company on you in a financial year, total amount comes is known as cost to company.

Mainly cost to company includes direct, indirect benefits and their savings. Direct benefits means the net salary that employees takes to home after reduction of taxes. Indirect benefits are called perquisite, like interest free loan is a best example of indirect benefits. In this benefit employees don’t have to pay interest and get interest free loan. Some companies are also give lunch and some other stuff at the office, which is also added as a expenses in your cost to company. Some companies added office rent to their employees CTC.

Employees also have to pay their part in provident fund which is 12% of employees basic salary in their provident fund account. This amount is also added to the CTC. Gratuity is also part of CTC which pay by employees as per Indian Government Law with @ 4.81% with no withdrawal before 5 years. So all these benefits, expenses and net salary combined amount is known as your cost to company.

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