Glossary · HR, Payroll & Labour Law
CTC
Cost to Company — the total annual expense incurred by the employer on an employee, including all salary components, benefits, and statutory contributions.
CTC includes: Basic + HRA + Special Allowances + Conveyance + Medical + LTA + Telephone + Books & Periodicals + Employer PF + Gratuity provision + Insurance premium + Variable pay + any other perquisites. It is the gross figure before deductions like income tax and employee PF. The take-home salary is significantly lower than CTC — for a ₹10L CTC, take-home is typically ₹6-6.5L. Variable pay (bonus, incentives) is often part of CTC but paid only if targets are met.
Examples
A candidate is offered a ₹12 LPA CTC comprising ₹5L basic, ₹2.5L HRA, ₹2.5L allowances, ₹78K employer PF, ₹58K gratuity provision, and ₹1.14L variable pay.