Quick Answer: What Is Fixed Pay In CTC?

How is fixed pay calculated in CTC?

How to calculate your take-home salary?Step 1: Calculate gross salary.

Gross Salary = CTC – (EPF + Gratuity)Step 2: Calculate taxable income.

Taxable Income = Income (Gross Salary + other income) – Deductions.

Step 3: Calculate income tax** …

Step 4: Calculating in-hand/take home salary..

What is CTC and take home salary?

CTC stands for Cost to Company. It is the sum of total amount a company is spending for an employee in a year. It includes the Take Home Salary along-with other benefits such as medical facilities, travel allowance, company contributions to retirement funds, house bills and travel allowance.

How is monthly CTC calculated?

It is calculated by adding salary to the cost of all additional benefits an employee receives during the service period. If an employee’s salary is ₹500,000 and the company pays an additional ₹50,000 for their health insurance, the CTC is ₹550,000. Employees may not directly receive the CTC amount.

What is the difference between fixed pay and CTC?

Broadly, while CTC includes all the payments and benefits, fixed and variable, that you are entitled to, your take-home salary is what you get after all the mandatory deductions, such as Employees’ Provident Fund (EPF) contribution and various taxes.

Is bonus a part of CTC?

The CTC typically includes fixed heads such as basic pay (which ranges around 40-50% of the CTC), home rent allowance (which ranges around 40-50% of the basic salary), employees’ provident fund (EPF), gratuity, other reimbursements such as car fuel and mobile bills etc., and variable components such as annual bonus and …

What will be my in hand salary?

What is the formula for salary calculation? Take Home Salary = Gross Salary – Income Tax – Employee’s PF Contribution(PF) – Prof. Tax. Gross Salary = Cost to Company (CTC) – Employer’s PF Contribution (EPF) – Gratuity.

Is basic salary fixed?

Basic salary is a fixed amount of money that an employee receives prior to any extras being added or payments deducted. It does not include bonuses, overtime pay or any other potential compensation from an employer.

Does compensation mean salary?

Compensation describes the cash rewards paid to employees in exchange for the services they provide. It may include base salary, wages, incentives and/or commission. Total compensation includes cash rewards as well as any other company benefits.

What does fixed pay mean?

Fixed pay is the fixed amount of salary that an employee gets at the end of the month whereas Variable pay is the incentive paid to the employee, monetary or non-monetary, based on their performance for the month. The ratio of fixed to the variable component, as a norm, varies based on the role the employee plays.

What is total fixed compensation in salary?

FIXED AMOUNT “Basic salary is your base, fixed income. It does not include bonuses, benefits or any other compensation from employers,” said Rajat Mohan, senior partner, AMRG Associates. Paid on a monthly basis, your retirement benefit and HRA is linked to your base salary. “It is usually 35-50% of your CTC.

What is current CTC for fresher?

CTC or Cost to Company is the total salary package and benefits of an employee per year. It is basically the amount that a company or employer is willing to spend both directly and indirectly on you as it’s employee. CTC is inclusive of monthly components such as basic pay, various allowances, reimbursements, etc.

What fixed monthly income?

Fixed monthly salary = basic monthly salary + fixed monthly allowances. Basic monthly salary: This is payment that does not vary from month to month, regardless of employee or company performance, and regardless of whether the employee takes medical or personal leave. … Examples include fixed food and housing allowances.

What is the difference between CTC and gross salary and net salary?

CTC is the amount a company spends on an employee and Gratuity is what it pays to the employee at retirement. However, Gross Salary is what a company pays to an employee before deductions and Net Salary is what an employee receives after deductions.

What is difference between compensation and salary?

Annual compensation, in the simplest terms, is the combination of your base salary and the value of any financial benefits your employer provides. Annual salary is the amount of money your employer pays you over the course of a year in exchange for the work you perform.

Is variable pay part of gross salary?

To put it in simpler terms, Gross Salary is the amount paid before deduction of taxes or other deductions and is inclusive of bonuses, over-time pay, holiday pay, and other differentials. … Variable pay is the portion of compensation determined by employee performance.