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What is the difference between CTC and basic 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.
How is CTC and gross salary calculated?
For example, your Cost To Company (CTC) is Rs 8 lakh. The employer gives you a bonus of Rs 50,000 for the financial year. Then your total gross salary is Rs 8,00,000 – Rs 50,000 = Rs 7,50,000 (the bonus is deducted from the Cost to Company). Gross Salary = Rs 8,00,000 – Rs 50,000 = Rs 7,50,000.
How Gross Salary is calculated?
Gross salary is calculated by adding an employee’s basic salary and allowances prior to making deductions, including taxes. Here, a basic salary is the base income of an employee or the fixed part of one’s compensation package. Provident Fund is not taken into account while deriving the gross salary.
What is your gross basic salary?
Basic salary is the figure agreed upon between a company, its employee, without factoring in bonus, overtime, or any kind of extra compensation. Gross salary, on the other hand, includes overtime pay and bonuses, but does not consider taxes and other deductions.
What is the difference between cost to Company (CTC) and gross salary?
Gross salary does not consider employer’s contribution towards gratuity, Employees Provident Fund and Employee’s State Insurance (ESI). Conversely, Cost to Company (CTC) includes the same. To sum up, it can be said that the difference between these two terms lies in the components covered.
What is the difference between CTC and employer’s contribution?
The employer’s contribution is added to the Cost to Company; the employer’s contribution is not added to the gross salary. CTC involves salary, reimbursements, contributions and tax benefits. Salary includes the basic amount, dearness allowance, house rent allowance and other allowances.
What is the difference between Gross and net salary?
Gross salary is the amount that is payable to the employee before the deduction of taxes and after the deduction of the Employee Provident Fund (EPF) contribution and gratuity subtracted from the CTC. Direct and indirect benefits, overtime salary, and other differentials are included in gross salary. What Is Net Salary and In-Hand Salary?
What is CTC in accounting?
CTC is cumulative of several smaller amounts. Some make up the salary that an employee receives in their account, while others are intangible expenses that a company spends on its employees. The components of CTC have been explained in detail later. What Is Gross Salary? Gross salary is often confused with CTC.