Avni Rustagi, belongs to Punjab, describes that she never gets what is the purpose of till date of her pay slip. To make her dreams true, Avni (is about 25 years and) migrated to Bangalore about four years before. She started the job with an information technology firm as a designer to achieve her goals. Avni lives in very wide and big house and pays Rs 10,000 rent per month. It is an important question to ask that how she manages her all expenditures but according to her opinion she is careless about it and says I don’t know what the finance is?
Avni says that she doesn’t know what is the meaning of her pay process and criteria that is known as CTC. She says that why I receive my CTC and what its totality. According to wealth point of view, the basic reason of Avni’s fear about pay is same as for other pay taker people. As compare to go on leaves the transformation of CTC is much confused. Well, it is discussable to know what will happen if CTC will stand against your home living.
Introduction of CTC:
Many of us are not familiar with CTC, what is it? Well, in general, CTC is an estimation of cost that is paid by the Employer Company that it pays you to employ just only for it. CTC is the total of your salary and all other charges and funds related to your job.
Let’s check out Avni’s CTC that is actually a cost to the company.
When taking Avni’s pay process and structure then we can say that it is quite clear and understandable. But usually different companies have their own CTC process and techniques. In many companies, CTC may be attractive and beneficial while others may not offer as much for take home purpose.
There is a wide range of CTC components are considered but here we’ll discuss some most important and necessary factors and elements applied in CTC.
- According to IT firms and organizations, the training or teaching expenses are also included in CTC. It is an expense form that is consumed by the company to train its employees about its basic techniques and methods. So, this type of CTC is not included in the home take process.
- Some banks and financial organizations add interest expenses in CTC. This type of CTC means that if you are bank employee then you’ll get some discounts and offers on loan and other bank transactions and processes.
- Bonuses are offered at the end of the financial year of some companies and it is also considered as CTC. As it is a variable factor, so it may vary each year due to percentage profit and revenue of a company that is calculated at the end of the financial year and it also paid according to your performance.
- Some companies include medical allowances and insurance policies in CTC. Food expenses, for example your lunch cost that you take during duty timings.
- Gratuity is also included in CTC in some companies. Gratuity that is also known as pension and provident fund that you receive on your resignation or retirement from company if you have worked for 5 years.
CTC is basically a cost of the company that it incurs on the benefits and all expenses of its employees to keep them employed. CTC includes, allowances, bonuses, insurances, food expenses, housing allowances, medical funds, and transportation facility of employees.