The total amount an employer spends on an employee in a year, including salary, allowances, and employer-side contributions.
CTC, or Cost to Company, is the full cost an employer bears for employing someone over a year — not just the salary paid out, but every direct and indirect expense tied to the role. It includes base salary, allowances, the employer's contribution to provident fund, gratuity provisions, health insurance premiums, and any performance bonuses.
CTC is almost always higher than take-home pay because it includes employer-side contributions the employee never receives directly in hand — money that goes into funds like EPF and gratuity instead. A CTC figure with a heavy variable-pay component can also look larger on paper than the guaranteed monthly income actually paid out.
Formula
CTC = Gross Salary + Employer PF Contribution + Gratuity Provision + Other Employer-Side Benefits
MedleyHR handles PF, ESI, TDS, and Form 16 automatically — free for up to 10 employees. Start free →
We use cookies to understand how visitors use MedleyHR.com — page views, feature interest, and drop-off points. No personal data is sold. Privacy policy