What is CTC and how it calculated?

Added: One month ago
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Vikas Bhardwaj
Vikas Bhardwaj One month ago

Hi Sahil, CTC is “Cost To Company” and it is the yearly expenditure that a company spends on an employee. Each employee's spend depends on their salary and variable. CTC is calculated by adding salary and additional all benefits that an employee receives such as EPF, gratuity, house allowance, food coupons, medical insurance, travel expense, and so on. CTC in colloquial terms is the cost an employer bears to hire and sustain its employees.

Formula: CTC = Gross Salary + Benefits.

If an employee's salary is ₹40,000 and the company pays an additional ₹5,000 for their health insurance, the CTC is ₹45,000. Employees may not directly receive the CTC amount as cash.

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