Hi Friends, Can any one help me out in fixing/allocating the percentage in CTC regards, sangee
From India, Madras
2From India, Madras
Hi Sangee,
Check out the below URl, you will get much information on Cost to the company (CTC).
https://www.citehr.com/search_new.ph...ponents+in+ctc
for more suggestions, citehr friends are ready to guide you.
Regards,
Saravana
Executive -HR
From India, Madras
Check out the below URl, you will get much information on Cost to the company (CTC).
https://www.citehr.com/search_new.ph...ponents+in+ctc
for more suggestions, citehr friends are ready to guide you.
Regards,
Saravana
Executive -HR
From India, Madras
Hi Sangee,
Normally the CTC allowances are different for every industries. Based on the grades the industry prepares thier salary grades and CTC structure.
But normally it can be calculated as -
Basic - 40 OR 50 % of gross (Also it depends on company salary grades)
DA - fixed and variable
HRA - 40 or 50 % of basic (depends on type of city)
Conv - 800/- tax exumpted.
Medical - 1250/- tax exumpted.
LTA - based on company policy.
CCA - based on company policy.
Special Allow - based on company policy.
Variable Pay - based on company policy.
Other Allo. - based on company policy.
PF - 13.61 % of basic + DA
Bonus - minimum 8.33% of basic + DA (if the basic is below Rs. 2500.00 pm) if above Rs. 2500.00 then company gives exgratia.
Gratuity - based on basic + DA
superannuation - based on basic + DA
Mediclaim - based on company policy.
ESI - 4.75 % of basic + DA
All above criteria should keep in mind while creating CTC structure.
Thanks,
Amit
From India, Mumbai
Normally the CTC allowances are different for every industries. Based on the grades the industry prepares thier salary grades and CTC structure.
But normally it can be calculated as -
Basic - 40 OR 50 % of gross (Also it depends on company salary grades)
DA - fixed and variable
HRA - 40 or 50 % of basic (depends on type of city)
Conv - 800/- tax exumpted.
Medical - 1250/- tax exumpted.
LTA - based on company policy.
CCA - based on company policy.
Special Allow - based on company policy.
Variable Pay - based on company policy.
Other Allo. - based on company policy.
PF - 13.61 % of basic + DA
Bonus - minimum 8.33% of basic + DA (if the basic is below Rs. 2500.00 pm) if above Rs. 2500.00 then company gives exgratia.
Gratuity - based on basic + DA
superannuation - based on basic + DA
Mediclaim - based on company policy.
ESI - 4.75 % of basic + DA
All above criteria should keep in mind while creating CTC structure.
Thanks,
Amit
From India, Mumbai
Hi Sangee,
The contents of the salary break up is as below, you can prepare it at the suitability of your own. HRA would be 50 or 60% of basic.
Basic
HRA
CCA - 825/- is exempted from tax
Other Allowance
Mobile Reimbursement
Medical Reimbursement of 1250/month is exempted from tax
Gross Per Month = Sum of all the above.
Gross Per Annum= 12*Gross/Month
PF Contribution= 12% of Basic/Annum
ESI Contribution = 4.75% of Gross/Annum
Medical = The mediclaim facility provided to an employee who are not covered under ESI as the maximum ceiling for ESI is 10000/Month.
Getting more than this will be covered under Mediclaim or it depends on company policy
EX-Gratia/Bonus = A fixed amount as Bonus
Annual Fixed Gross Cost= Gross/Annum+ Ex-gratia
Annual Total Cost = AFGC + PF+ESIC
Annual total cost is also called as CTC.
Apart from this Food coupons, Holiday package and Furnishing items are included in their CTC.
Hope it must help you to clear your queries up to some extent.
Regards,
Amit Seth.
From India, Ahmadabad
The contents of the salary break up is as below, you can prepare it at the suitability of your own. HRA would be 50 or 60% of basic.
Basic
HRA
CCA - 825/- is exempted from tax
Other Allowance
Mobile Reimbursement
Medical Reimbursement of 1250/month is exempted from tax
Gross Per Month = Sum of all the above.
Gross Per Annum= 12*Gross/Month
PF Contribution= 12% of Basic/Annum
ESI Contribution = 4.75% of Gross/Annum
Medical = The mediclaim facility provided to an employee who are not covered under ESI as the maximum ceiling for ESI is 10000/Month.
Getting more than this will be covered under Mediclaim or it depends on company policy
EX-Gratia/Bonus = A fixed amount as Bonus
Annual Fixed Gross Cost= Gross/Annum+ Ex-gratia
Annual Total Cost = AFGC + PF+ESIC
Annual total cost is also called as CTC.
Apart from this Food coupons, Holiday package and Furnishing items are included in their CTC.
Hope it must help you to clear your queries up to some extent.
Regards,
Amit Seth.
From India, Ahmadabad
dear amit i would like to share you how you calculate the pf as 13.61%. regards jaychandran
From India, Panvel
From India, Panvel
Hi Jaychandran,
The distribution of 13.61% is like this..
Statutory rate of contribution is 12% of Basic salary
Pay a contribution of 0.5% of the emoluments towards EDLI Scheme.
Pay administrative charges at 1.10% of emoluments towards provident fund charges and 0.01% towards EDLI Scheme.
Hope now it must be clear with you..
Regards,
Amit Seth.
From India, Ahmadabad
The distribution of 13.61% is like this..
Statutory rate of contribution is 12% of Basic salary
Pay a contribution of 0.5% of the emoluments towards EDLI Scheme.
Pay administrative charges at 1.10% of emoluments towards provident fund charges and 0.01% towards EDLI Scheme.
Hope now it must be clear with you..
Regards,
Amit Seth.
From India, Ahmadabad
I have experienced in one of the Private Sector Companies, that even the cost of the fuel/ cost of the expenses on Mobiles, all sort of reimbursements. are also being included as CTC.
In my view the CTC is fundamentally what we spend to retain a person (Salary, in whatever name or subname, and the subsidies of the facilities for the employee concerned). Reimbursement of the expenses are the expenses that we do to get the jobs done from our employees, and not part of CTC
Does any one differ on the subject?
Regards,
Pradeep Bajaj
From India, Delhi
In my view the CTC is fundamentally what we spend to retain a person (Salary, in whatever name or subname, and the subsidies of the facilities for the employee concerned). Reimbursement of the expenses are the expenses that we do to get the jobs done from our employees, and not part of CTC
Does any one differ on the subject?
Regards,
Pradeep Bajaj
From India, Delhi
Dear Pradeep,
The two different ways of calculating CTCs quoted in your post are two extremely different ways of looking at the concept of CTC. Treated as an HR term, CTC is very much what you say it is - "Fundamentally what we spend to retain a person". I believe it should continue to be kept so as it has become a normally used phrase by HR today and should not be confused with anything else.
Having said this, I thing I should also mention that CTC (Cost to Company, irrespective of the resource or dept. applied to) is basically a finance term and literally means the Cost to a company in getting a thing done. The "thing" could begin with any of the the smallest function or sub-functions in a company. For e.g. the cost to a Bank in processing a Loan will include various aspects like, administrative expenses, Lawyer charges, communication expenses, Prospecting expenses, Sales Personnel expenses, consultation expenses, conveyance and time of executives.... and so on.
Similarly in Corp finance terms, an employee is one unit of a resource (human) applied for getting a resultant objective. Lets call this objective "X" for now. So all the resources applied in order to achieve the "X" objective together form the CTC to the company to achieve that objective. The calculation of this varies with the finance policies followed by companies.
For e.g. for a Sales Executive's profile, where the job is to achieve Rs. 100000/- of Sales the cost to the company in achieving that Sales T.O. will realistically include his gross remuneration + all the expenses that you mentioned in your post. And if the total CTC here becomes more than Rs.100000/- the Human Resource (Sales Executive) is a big loss to the company and not worth investing in. In fact to get a financially realistic value of the costs, some companies even include opportunity costs like cost of leave (any kind) taken, cost of results not achieved (vis-a-vis a performer in his place) and so on to calculate the value of CTC.
However, like I said before, the Term CTC has become more of an HR term today used in a particular context within specified scope and so it must be retained so with a fair degree of Standardisation across employers everywhere.
I hope this clears your query.
Regards
SKN
The two different ways of calculating CTCs quoted in your post are two extremely different ways of looking at the concept of CTC. Treated as an HR term, CTC is very much what you say it is - "Fundamentally what we spend to retain a person". I believe it should continue to be kept so as it has become a normally used phrase by HR today and should not be confused with anything else.
Having said this, I thing I should also mention that CTC (Cost to Company, irrespective of the resource or dept. applied to) is basically a finance term and literally means the Cost to a company in getting a thing done. The "thing" could begin with any of the the smallest function or sub-functions in a company. For e.g. the cost to a Bank in processing a Loan will include various aspects like, administrative expenses, Lawyer charges, communication expenses, Prospecting expenses, Sales Personnel expenses, consultation expenses, conveyance and time of executives.... and so on.
Similarly in Corp finance terms, an employee is one unit of a resource (human) applied for getting a resultant objective. Lets call this objective "X" for now. So all the resources applied in order to achieve the "X" objective together form the CTC to the company to achieve that objective. The calculation of this varies with the finance policies followed by companies.
For e.g. for a Sales Executive's profile, where the job is to achieve Rs. 100000/- of Sales the cost to the company in achieving that Sales T.O. will realistically include his gross remuneration + all the expenses that you mentioned in your post. And if the total CTC here becomes more than Rs.100000/- the Human Resource (Sales Executive) is a big loss to the company and not worth investing in. In fact to get a financially realistic value of the costs, some companies even include opportunity costs like cost of leave (any kind) taken, cost of results not achieved (vis-a-vis a performer in his place) and so on to calculate the value of CTC.
However, like I said before, the Term CTC has become more of an HR term today used in a particular context within specified scope and so it must be retained so with a fair degree of Standardisation across employers everywhere.
I hope this clears your query.
Regards
SKN
Hi Nair,
I am greatly grateful for clarifying CTC in such detail, and in simple and lucid expression.
CTC you explain is Corporate concern, whereas, CTC I had perceived is part of the staff work of the HR Person, and concerns an employee/ perspective employee, as he negotiates his salary with the Company he wishes to join for work.
Regards,
Pradeep Bajaj
From India, Delhi
I am greatly grateful for clarifying CTC in such detail, and in simple and lucid expression.
CTC you explain is Corporate concern, whereas, CTC I had perceived is part of the staff work of the HR Person, and concerns an employee/ perspective employee, as he negotiates his salary with the Company he wishes to join for work.
Regards,
Pradeep Bajaj
From India, Delhi
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