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Must to know about designing CTC-Cost to Company of an employee
#1
Dear Friends,

Sharing one of my popular blog post on "Must to know about designing CTC-Cost to Company of an employee"

CTC -Cost to Company

CTC- This term is confusing for many people and my post will help them to understand this better. Definition of Cost to Company differ from company to company and every company has its own structure and salary components which company wants to make part of CTC. For simple understanding, let me define CTC which includes cost which company incur on employee in form of statutory contributions, reimbursement, benefits and sometime administrative costs other than Gross salary of employee.

We will understand all the possible components which company can put in CTC and what is the impact of these components on your in hand and tax liability.

CTC includes various components like:

Fixed Salary : It includes Basic, DA, HRA, Conveyance, City compensatory Allowance, Special Allowances etc

Variable Salary : It includes Performance based incentive, Sale based incentive and Profit based bonus.

Reimbursements : It includes reimbursement of conveyance, medical, telephone, Books and Periodicals, Leave Travel Allowance.

Contributions: It includes the benefits offered by the company like Provident Fund, ESI, Superannuation, Gratuity, Statutory Bonus, Medical
Insurance, Accident Insurance, Leave encashment etc.

Stock Options: Stock Options


Read more : http://hrsuccesstalk.com/2014/04/22/must...-employee/

Govind Singh Negi
HR Professional- Sr Management
Follow at twitter: @govindsinghneg3 https://twitter.com/govindsinghneg3
Catch on Facebook: http://www.facebook.com/pages/HR-Success...2717854041
 
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#2
(23-04-2014, 07:48 AM)govindsinghnegi Wrote: Dear Friends,

Sharing one of my popular blog post on "Must to know about designing CTC-Cost to Company of an employee"

CTC -Cost to Company

CTC- This term is confusing for many people and my post will help them to understand this better. Definition of Cost to Company differ from company to company and every company has its own structure and salary components which company wants to make part of CTC. For simple understanding, let me define CTC which includes cost which company incur on employee in form of statutory contributions, reimbursement, benefits and sometime administrative costs other than Gross salary of employee.

We will understand all the possible components which company can put in CTC and what is the impact of these components on your in hand and tax liability.

CTC includes various components like:

Fixed Salary : It includes Basic, DA, HRA, Conveyance, City compensatory Allowance, Special Allowances etc

Variable Salary : It includes Performance based incentive, Sale based incentive and Profit based bonus.

Reimbursements : It includes reimbursement of conveyance, medical, telephone, Books and Periodicals, Leave Travel Allowance.

Contributions: It includes the benefits offered by the company like Provident Fund, ESI, Superannuation, Gratuity, Statutory Bonus, Medical
Insurance, Accident Insurance, Leave encashment etc.

Stock Options: Stock Options


Read more : http://hrsuccesstalk.com/2014/04/22/must...-employee/

Excellent post.
Now if we want to design salary component is such a way that employees will take more pay in hand and less in tax...As we know that employees have to submit the bill to the employer...

1-Is it possible that without submission of any bill, the employer can give that benefit to employees about the various reimbursement like (Training, Phone, Meal etc). IF yes then what should employer has to maintain or /and if no then what are issues employer going to face)
 
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#3
Hi Friend,

It is required to submit bills for all the reimbursements.

Govind Singh Negi
HR Professional- Sr Management
Follow at twitter: @govindsinghneg3 https://twitter.com/govindsinghneg3
Catch on Facebook: http://www.facebook.com/pages/HR-Success...2717854041
 
Reply
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