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
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
Really the CTC is a concept adopted by the employers to lure the employees. I often tell the candidates, especially when I take sessions to B Schools, to study the offer letter and CTC part very carefully and ensure what should be their take home salary, and what shall be their investments (like PF, Gratuity etc) and then what all are to be ignored as a lottery (like performance linked incentives). I had written an article in my blog some time in 2010 about it. Please find the same in the link
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) which is instrumental and that is why the interviewer asks the candidate, "why should we hire you?" which implies what 'benefit' shall we get if we take you?
From India, Kannur
4279https://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) which is instrumental and that is why the interviewer asks the candidate, "why should we hire you?" which implies what 'benefit' shall we get if we take you?
From India, Kannur
Most of the current youth in employment almost aware of what are all included in CTC and understand the different features of gross salary, net salary, take home etc. But still what is generally & broadly known is conventional 'gross salary' represents total emoluments payable in "cash" and various natures of deduction that are legally permissible in INdia and net payable/ credited to bank a/c- printed on the 'pay slip which have to be understood clearly. On the other hand, 'Non-cash' components which are NOT payable in 'cash' monthly but deferred payments such as EPF Employer's contribution which goes to the credit of employees' EPF A/cs, annual bonus', leave and leave encashment, gratuity, LTC, incentives, other etc. When you combine both it becomes CTC.
From India, Bangalore
From India, Bangalore
Cost to Company is not defined at all in any labour 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 take their decision.
Not sure how it really benefits the company in the long run, but it is now the norm...
From India, Mumbai
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 take their decision.
Not sure how it really benefits the company in the long run, but it is now the norm...
From India, Mumbai
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
- 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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