What are the benefits of Cost to Company packages for your pocket?


(Source: Neubie)

Short Answer: None 

Long Answer: Definition of CTC,  Example, Warning and Suggested Actions below. 


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.


The package will include:

• Travel allowance

•Company contribution to medical aid

•Company contribution to provident fund  and

•Cash component.


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?

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What are the benefits of Cost to Company packages for your pocket?

4 Responses

  1. I would like to receive some document explaining the cost to company as per SARS defination

    S.W Zungu May 31, 2011 at 10:26 pm #
  2. There is no SARS definition.

    Yusuf Mahomedy June 2, 2011 at 2:02 am #
  3. 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

    Mir Asgher Mahdi. June 18, 2011 at 7:06 am #
  4. That doesn’t make sense regarding the CTC structure!

    If several employees are affected by this, I suggest that you email me.

    Yusuf Mahomedy June 20, 2011 at 11:17 am #

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