Should employees ESIC contribution be shown in Cost to Company (CTC) or not?
From India, Delhi
Acknowledge(0)
Amend(0)
From India, Delhi
Acknowledge(0)Amend(0)
Dear Colleague,
Whether to show or not to show the Statutory components like ESI in the CTC working and CTC Sheet is purely an internal decision of the organization and depends on the organization's compensation policy. There are no hard and fast rules or legal guidelines on this. It is a common practice in the industry to have a CTC working sheet prepared and provided to each individual for clarity and better Compensation Administration.
The concept of CTC is to understand and estimate the Cost to Company for each talent engaged to accurately budget and calculate yearly increases. Additionally, it provides clarity to both employees and employers regarding the eligible components and their breakdown. Some companies display all statutory components such as PF, ESI, Gratuity, Bonus, and Profession Tax on the CTC Sheet. On the other hand, many companies do not include the Statutory components but mention that "In addition to the CTC, the applicable Statutory Components like PF, ESI, Gratuity, Bonus, Leave with Wages, P.Tax are applicable as per Statute." Thus, it is more of an internal policy determined by the Compensation Policy of the organization for their convenience.
Based on my practical experience, it is advisable to include all relevant components in the CTC sheet clearly to avoid disputes or misunderstandings later on. This practice also simplifies the estimation of compensation and benefit costs.
Thank you.
From India, Chennai
Acknowledge(0)Amend(0)
337Whether to show or not to show the Statutory components like ESI in the CTC working and CTC Sheet is purely an internal decision of the organization and depends on the organization's compensation policy. There are no hard and fast rules or legal guidelines on this. It is a common practice in the industry to have a CTC working sheet prepared and provided to each individual for clarity and better Compensation Administration.
The concept of CTC is to understand and estimate the Cost to Company for each talent engaged to accurately budget and calculate yearly increases. Additionally, it provides clarity to both employees and employers regarding the eligible components and their breakdown. Some companies display all statutory components such as PF, ESI, Gratuity, Bonus, and Profession Tax on the CTC Sheet. On the other hand, many companies do not include the Statutory components but mention that "In addition to the CTC, the applicable Statutory Components like PF, ESI, Gratuity, Bonus, Leave with Wages, P.Tax are applicable as per Statute." Thus, it is more of an internal policy determined by the Compensation Policy of the organization for their convenience.
Based on my practical experience, it is advisable to include all relevant components in the CTC sheet clearly to avoid disputes or misunderstandings later on. This practice also simplifies the estimation of compensation and benefit costs.
Thank you.
From India, Chennai
Acknowledge(0)Amend(0)Engage with peers to discuss and resolve work and business challenges collaboratively - share and document your knowledge. Our AI-powered platform, features real-time fact-checking, peer reviews, and an extensive historical knowledge base. - Join & Be Part Of Our Community.
ESIC-Contributi on-Transfer-For m.pdf