Question: What Is CTC LPA?

How is CTC calculated?

It is calculated by adding salary to the cost of all additional benefits an employee receives during the service period.

If an employee’s salary is ₹500,000 and the company pays an additional ₹50,000 for their health insurance, the CTC is ₹550,000.

Employees may not directly receive the CTC amount..

What is the difference between CTC and salary?

The CTC includes all the elements of a salary structure – basic salary, House Rent Allowance (HRA), Basic Allowance, Travel Allowance, Medical, Communication, Provident Fund, Pension Fund, and or any incentives or variable pay. … The entire amount of your basic salary is included in your take-home salary.

Which is better CTC or gross salary?

Gross salary is the amount after the EPF and gratuity are subtracted from the CTC. Basically, the remuneration paid before deducting the income tax, professional tax, and other deductions. It is inclusive of bonuses, overtime pay, paid holiday amount, and other differentials.

What percentage of CTC is basic?

Usually, basic salary is 40% to 50% of CTC (Cost to Company). Statutory components such as bonus, PF, gratuity and other benefits are determined on the basis of the basic salary. Any increase or decrease of basic salary can affect an employee’s CTC. Is basic salary taxable?

How much is deducted from CTC?

Twelve per cent of the basic salary gets contributed from the employee for PF and another 12 per cent by the employer. So 24 per cent of the basic salary gets deducted.

What is current CTC mean?

your current yearly cost to companyCTC means Cost To Company. In general term we call it package. Current CTC means your current yearly cost to company. This includes your in-hand salary + PF deduction + TDS deduction + Any other allowance and deduction company providing/deducting from salary. (

What is CTC and variable pay?

Cost-to-company or CTC is the total salary package an employee receives from the company they work in. … The total salary package includes monthly components such as basic pay, various allowances, reimbursements, and annual components including gratuity, annual variable pay, annual bonuses, among others.

Is PF included in CTC?

Most employers contribute 12% (called PF) of basic salary every month to employee’s Provident fund account, shown in CTC. An employee also contributes 12% (called VPF). … Employer PF is part of CTC not shown on Salary Slip.

How is PF calculated from CTC?

EPFO rules call for deducting 12.5% of the employee’s basic pay as PF contribution and an equal amount has to be chipped in by the employer. … It is a part of CTC as the total expenditure incurred on the employee each month,” said a HR manager in a private civil construction firm.

Is 30 LPA a good salary?

30 LPA is awesome for a middle-class person. But more is possible for a person earning 30 LPA as an employee (because that requires near-mastery of the skill, in this case, software development).

What mean by CTC salary?

cost to companyWhile business owners in many other countries may use terms like “gross salary” and “net salary” when referring to an employee’s salary, “cost to company” or CTC is the most common term used in India. This term includes the direct and indirect costs associated with paying an employee.

Is 5 LPA a good salary?

Five lakhs for big and expensive cities wont be enough, definitely you’ll survive, but I am sure, since you are a fresher, you are looking forward to “living life to its fullest”, but at this salary, first few years will be dull. But don’t worry, “Satisfaction lies in the effort, not in the attainment.

How do I ask for more CTC?

One should use this data to take an informed stand prior to the salary negotiation.What value you bring in? … Overcome fear/shyness: … Last drawn salary as the baseline: … Comprehend and negotiate the CTC components: … Be realistic and reasonable:

What is CTC structure?

CTC. CTC or Cost to Company is the total amount that a company spends (directly or indirectly) on an employee. … CTC is inclusive of monthly components such as basic pay, various allowances, reimbursements, etc. and annual components such as gratuity, annual variable pay, annual bonus, etc.

How do you create a CTC break up?

CTC = Gross Salary + Gratuity + Employer Contributions (PF /ESIC) What is Gross Salary?Gross Salary = Basic Salary + HRA + Bonus + Other Allowances. … Net Salary = Gross Salary – Income Tax – PF – ESIC – Other Deductions. … Basic Salary. … Conveyance Allowance. … Statutory Bonus. … Books and Periodicals. … Provident Fund (PF)More items…

What is CTC and gross?

CTC is the amount a company spends on an employee and Gratuity is what it pays to the employee at retirement. However, Gross Salary is what a company pays to an employee before deductions and Net Salary is what an employee receives after deductions.

How do you break up with a CTC?

In a nutshell, Net Salary = Basic Salary + Allowances – Income Tax/ TDS – Employer’s Provident Fund – Professional Tax. Add the allowances to the basic salary and you arrive at the gross salary. This amount is calculated before the application of taxes and other deductions.

What is annual income?

Annual income is the total income that you earn over one year. Depending on the data that is required to determine your annual income, you may base your income on either a calendar year or a fiscal year.