Cost to company, take-home salary and taxable income
The calculation of cost to company, take-home salary and taxable income are important parameters for both the employee and the employer. So yesterday your supervisor got a little upset with your attitude and hinted how much employees cost the company and you thought: But I get only this amount of cash every month. True. The real cost of an employee to the company is not just the basic salary and the perks it pays you. It includes things like bonuses and commissions. Also contributions made by the employer to your provident fund gets added.
Now what you get finally in your hand is what is left after various deductions like taxes and your contribution to various funds. Of course, your contributions to funds like the provident fund will be available to you at a later date depending on company’s policies and government regulations. Therefore you need to know how your income taxes are calculated, what is the total ctc and finally your take-home cash. A good knowledge of these factors may help you to negotiate with the Human Resources Department when your promotion or increment is due based on your performance!
CALCULATION OF COST TO THE COMPANY (CTC)