Cost to Company (CTC)
The total amount a company spends on an employee in a year — not the amount that lands in their bank account, which is usually meaningfully lower.
What it is
Cost to Company (CTC) is the total annual cost an employer incurs for an employee — it's an employer-side accounting figure, not a promise of take-home pay. CTC bundles together the employee's fixed pay components (basic salary, HRA, and other allowances), employer-side statutory contributions the company pays on the employee's behalf (like employer PF and ESI), and often variable components like bonus targets, insurance premiums, and gratuity provisioning.
Why CTC and take-home pay are different numbers
A large chunk of CTC never reaches the employee's bank account as cash: employer PF contributions go straight to the employee's retirement account rather than their salary account, employer ESI (where applicable) funds the insurance scheme rather than being paid out, and the employee's own PF, ESI, professional tax, and income tax (TDS) are all deducted from the salary portion of CTC before the remainder is actually paid. It's common — and a frequent source of new-hire confusion — for an offered CTC figure to be meaningfully higher than the monthly amount that shows up in the bank account.
Try the calculator
To see roughly how a given annual CTC breaks down into gross salary, statutory deductions, and estimated take-home pay, use our Take-Home Salary Calculator — every assumption in it (basic percentage, HRA percentage, tax slabs) is editable so you can match it to your actual offer letter or salary structure.