Some companies calculate it by adding the employer’s contribution towards PF (Provident Fund) and Gratuity to the gross salary.įun Fact: RazorpayX Payroll platform provides this as a configuration option to users, so you can choose how to define the CTC structure for your employees. It includes various components like basic pay, provident fund, allowances, etc. Having said that, it is essential to note that CTC is never equal to the take-home pay received at the end of the month.ĬTC is the total amount spent by the company on an employee, whether directly or indirectly. The CTC, or cost-to-company, is the total salary package that the company offers an employee during recruitment. What are the components of salary breakup?Ī salary breakup structure or a CTC (cost-to-company) breakup structure is the structure in which the CTC is divided into various components to arrive at the in-hand salary of an employee.What is the difference between CTC and in-hand salary?.
