When CTC (Cost to Company) is not clearly defined by labor laws, why do companies offer it to employees? Employees work for wages, not salary.
Many freshers and beginners often feel deceived by the company when they receive a salary that differs from the amount initially offered or the "in-hand" amount. This discrepancy can lead to confusion and dissatisfaction, as the full breakdown of CTC is not always transparent, leaving new employees uncertain about their true compensation.
From India , Chandigarh
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Many freshers and beginners often feel deceived by the company when they receive a salary that differs from the amount initially offered or the "in-hand" amount. This discrepancy can lead to confusion and dissatisfaction, as the full breakdown of CTC is not always transparent, leaving new employees uncertain about their true compensation.
From India , Chandigarh
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Really, the CTC is a concept adopted by the employers to lure the employees. I often tell the candidates, especially when I take sessions at B-Schools, to study the offer letter and CTC part very carefully. They should ensure what their take-home salary should be, what their investments (like PF, Gratuity, etc.) will be, and then what all should be ignored as a lottery (like performance-linked incentives). I had written an article on my blog back in 2010 about this. Please find the same at the link below:
https://madhu-t-k.blogspot.com/2010/02/ctc-vs-btc.html
I would say that it is not the CTC but the BTC (Benefit To Company) that is instrumental. That is why the interviewer asks the candidate, "why should we hire you?" which implies what 'benefit' we shall get if we take you.
From India, Kannur
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4761https://madhu-t-k.blogspot.com/2010/02/ctc-vs-btc.html
I would say that it is not the CTC but the BTC (Benefit To Company) that is instrumental. That is why the interviewer asks the candidate, "why should we hire you?" which implies what 'benefit' we shall get if we take you.
From India, Kannur
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Most of the current youth in employment are almost aware of what is included in CTC and understand the different features of gross salary, net salary, take-home, etc. However, what is generally and broadly known is that conventional 'gross salary' represents total emoluments payable in "cash" and various deductions that are legally permissible in India, with the net amount payable/credited to the bank account - printed on the pay slip, which must be clearly understood.
On the other hand, 'Non-cash' components refer to items not paid in cash monthly but as deferred payments, such as EPF Employer's contribution, which goes to the employees' EPF accounts, annual bonus, leave and leave encashment, gratuity, LTC, incentives, and others. When you combine both, it becomes CTC.
From India, Bangalore
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On the other hand, 'Non-cash' components refer to items not paid in cash monthly but as deferred payments, such as EPF Employer's contribution, which goes to the employees' EPF accounts, annual bonus, leave and leave encashment, gratuity, LTC, incentives, and others. When you combine both, it becomes CTC.
From India, Bangalore
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(Fact Checked)-Your explanation about the components of CTC is accurate and well-articulated. It's crucial to be informed about the different elements of our earnings. Keep it up! (1 Acknowledge point)
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Cost to Company is not defined at all in any labor law. It is something that HR has come up with to fool the candidates into thinking it is paying more. Probably came up from MBA colleges who wanted to pretend their students get paid very high salaries.
That is why fresh recruits leave (if they can), often without notice and jump at the first opportunity. Next time (second job), they first ask the take-home pay and then make their decision. Not sure how it really benefits the company in the long run, but it is now the norm.
From India, Mumbai
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That is why fresh recruits leave (if they can), often without notice and jump at the first opportunity. Next time (second job), they first ask the take-home pay and then make their decision. Not sure how it really benefits the company in the long run, but it is now the norm.
From India, Mumbai
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(Amendment impartial review)-While CTC isn't directly defined in labor laws, it's a standard HR practice for total compensation transparency, not deception. It helps candidates compare offers. Appreciate your perspective!(Reality may align with HUMAN perspective. more research needed.)
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Companies offer CTC (Cost to Company) packages for several reasons:
- To present a more attractive overall compensation
- To provide a comprehensive view of total employee benefits
- To allow flexibility in structuring compensation
- To align with industry standards
However, the lack of transparency in CTC breakdowns often leads to confusion and dissatisfaction among freshers. They may feel deceived when their actual take-home pay differs significantly from the CTC figure. To address this:
- Companies should provide clear CTC breakdowns during hiring
- HR should educate new hires about compensation components
- Employers should emphasize actual take-home pay alongside CTC
- Freshers should understand that initial compensation may be lower due to training costs
While employees work for wages, CTC remains a common practice. Improved transparency can help avoid misunderstandings and maintain employee satisfaction.
From India, Dhanbad
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- To present a more attractive overall compensation
- To provide a comprehensive view of total employee benefits
- To allow flexibility in structuring compensation
- To align with industry standards
However, the lack of transparency in CTC breakdowns often leads to confusion and dissatisfaction among freshers. They may feel deceived when their actual take-home pay differs significantly from the CTC figure. To address this:
- Companies should provide clear CTC breakdowns during hiring
- HR should educate new hires about compensation components
- Employers should emphasize actual take-home pay alongside CTC
- Freshers should understand that initial compensation may be lower due to training costs
While employees work for wages, CTC remains a common practice. Improved transparency can help avoid misunderstandings and maintain employee satisfaction.
From India, Dhanbad
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(Fact Checked)-Your explanation of CTC and its impact on employee satisfaction is spot on! Encouraging companies to be more transparent about the CTC breakdown is indeed a great step towards better HR practices. (1 Acknowledge point)
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Yes, It is true despite The laws were defined about the emoluments and employer contributions which is contained / related to CTC.
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(Fact Checked)-You're correct that laws define emoluments and employer contributions, but clarity on CTC is not mandated. This indeed can lead to confusion among employees. (1 Acknowledge point)
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(Fact Checked)-Your explanation of CTC and its implications for employees is quite insightful. A comprehensive understanding of CTC components is indeed crucial to avoid misunderstandings. Keep sharing! (1 Acknowledge point)