Hi, Can any one tell me how to calculate the gross when CTC is Given. For eg:- CTC p.a - 6,00,000. Please tell me how can I find the gross amount per month from this. reks
From United Arab Emirates, Dubai
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From United Arab Emirates, Dubai
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Reks,
From your question, I understood what the components are that come into Gross and Net. For clear understanding purposes, I have provided 2-3 different explanations for the same.
Explanation no.1)
Net salary is the take-home salary of the employee, while gross salary is the figure before making statutory or other deductions.
Gross salary comprises basic salary, HRA, transport allowance, and other allowances.
Gross salary minus PF contribution, ESI contribution, professional tax contribution, and any other applicable taxes becomes net salary.
Explanation no.2)
Gross Salary is the agreed/committed compensation your organization agrees to pay on a monthly (periodic) basis for your services during that period.
Net Salary is the gross salary less deductions made for statutory compliances (such as PF, ESI, Income Tax, Professional Tax) and other dues (like loans and advances taken) owed to the company and any legal dues. It is the amount you receive in hand and commonly referred to as Take-Home Pay.
Your Income Tax is based on the Gross Pay.
CTC or Cost to Company equals Gross pay + Benefits, Perks, and Perquisites, which represent the total cost the company incurs in employing the person.
Income Tax is based on the annual CTC (or Total Income), which includes all perks and perquisites.
Also, based on my understanding, Gross Salary is the total salary received on a MONTHLY BASIS. This excludes annual components like LTA, bonuses, etc. CTC consists of Gross Pay + annual components + perks/benefits/perquisites, whether in cash or kind. Net pay is the take-home pay after all deductions.
However, some people define Gross pay as the total of only the CASH components. Non-cash components like a driver, sweeper, company accommodation, etc., for which the employee does not make payments, are excluded. Nevertheless, these are part of CTC.
Don't get confused with all the explanations. Follow only one.
Regards,
Visu.
From India, Hyderabad
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1From your question, I understood what the components are that come into Gross and Net. For clear understanding purposes, I have provided 2-3 different explanations for the same.
Explanation no.1)
Net salary is the take-home salary of the employee, while gross salary is the figure before making statutory or other deductions.
Gross salary comprises basic salary, HRA, transport allowance, and other allowances.
Gross salary minus PF contribution, ESI contribution, professional tax contribution, and any other applicable taxes becomes net salary.
Explanation no.2)
Gross Salary is the agreed/committed compensation your organization agrees to pay on a monthly (periodic) basis for your services during that period.
Net Salary is the gross salary less deductions made for statutory compliances (such as PF, ESI, Income Tax, Professional Tax) and other dues (like loans and advances taken) owed to the company and any legal dues. It is the amount you receive in hand and commonly referred to as Take-Home Pay.
Your Income Tax is based on the Gross Pay.
CTC or Cost to Company equals Gross pay + Benefits, Perks, and Perquisites, which represent the total cost the company incurs in employing the person.
Income Tax is based on the annual CTC (or Total Income), which includes all perks and perquisites.
Also, based on my understanding, Gross Salary is the total salary received on a MONTHLY BASIS. This excludes annual components like LTA, bonuses, etc. CTC consists of Gross Pay + annual components + perks/benefits/perquisites, whether in cash or kind. Net pay is the take-home pay after all deductions.
However, some people define Gross pay as the total of only the CASH components. Non-cash components like a driver, sweeper, company accommodation, etc., for which the employee does not make payments, are excluded. Nevertheless, these are part of CTC.
Don't get confused with all the explanations. Follow only one.
Regards,
Visu.
From India, Hyderabad
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Dear Friend,
Gross Salary includes all the statutory benefits and perks. The difference between CTC and Gross is due to the difference of EMPLOYER PF from the CTC, i.e., CTC - (Employer Pf + Gratuity) = Gross Salary. Gross Salary - (LTA + PF Employee + tax) = Net Salary.
Hope you got it.
Thanks,
Dhoop
From India, Pune
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Gross Salary includes all the statutory benefits and perks. The difference between CTC and Gross is due to the difference of EMPLOYER PF from the CTC, i.e., CTC - (Employer Pf + Gratuity) = Gross Salary. Gross Salary - (LTA + PF Employee + tax) = Net Salary.
Hope you got it.
Thanks,
Dhoop
From India, Pune
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GROSS SALARY&CTC FOR 15500.xls