(Source: Neubie)
Short Answer: None
Long Answer: Definition of CTC, Example, Warning and Suggested Actions below.
Definition
A cost to company or total cost package is a method used by an employer to remunerate an employee based on a package, being the guaranteed sum of money the employer will spend on that position. The guaranteed sum is allocated by the employee to earnings, benefits, allowances and company contributions, subject to various regulations.
Example
The package will include:
• Travel allowance
•Company contribution to medical aid
•Company contribution to provident fund and
•Cash component.
Warning
When joining a company or accepting a conversion to total cost packages, don’t automatically expect these benefits:
• Tax compliance and efficiency
• Internal pay equity
• Lower economic risk
• Flexibility and choice
• Higher Net Take Home Pay
Suggested Actions
1. Before you sign on the dotted line, make sure that you understand the short and long term financial implications for your pocket. Or it could end up being a total(ly) cost(ly) package for you!
2. If you are in doubt, get professional advice and renegotiate your package.
Do you have a horror CTC story to share?
May 31, 2011 at 10:26 pm
I would like to receive some document explaining the cost to company as per SARS defination
June 2, 2011 at 2:02 am
There is no SARS definition.
June 18, 2011 at 7:06 am
In an instant case, PF contribution from employer side will be reflected by the company in its CTC as full. How can it reflects in its cost as half of the PF contrubution is payable from the employee from its earned Salary.
For eg, The company is reflecting full PF amount Rs.1200 PF & payment to the PF welfare the same that include employee contribution
June 20, 2011 at 11:17 am
That doesn’t make sense regarding the CTC structure!
If several employees are affected by this, I suggest that you email me.
November 25, 2011 at 11:58 am
In a case where an employement contract states that the salary offer is calculated based on a CTC package and also that the employee is entitled to a 13th cheque. Is it correct for the employee to receive a 13th cheque that is equivalent to a month’s basic salary? I smell a rat.
November 26, 2011 at 5:01 pm
The CTC structure, employment documentation & provision of a 13th cheque should be reviewed.