Difference between Cost to Company (CTC) and Salary
Basis |
Cost to Company (CTC) |
Salary |
---|---|---|
Definition |
It is a total package including both salary and benefits offered by the managing company. | The amount received by the employee as take-home pay. |
Components |
Includes all monetary and non-monetary components, such as basic salary, allowances, bonuses, benefits, and more. | Typically consists of the basic salary and allowances, which are the taxable components. |
Employee’s Perception |
Can appear larger, but not all of it is available as take-home pay. | Represents what an employee takes home and can budget with. |
Negotiation Tool |
Often used as a negotiation tool during job offers and can be higher than the actual salary. | It is for understanding the actual income an employee will receive and managing expenses. |
Calculation |
Calculated by summing up all the components that make up the total compensation package, often on an annual basis. | It is the actual money provided every month to employees. |
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