Glossary
Cost to Company (CTC)
The total annual employer cost per employee — cash pay, benefits and statutory contributions — that the wages-deeming rule now reshapes into a different statutory wages base.
CTC bundles every cost an employer attributes to an employee — basic pay, allowances, employer PF/ESI contributions, insurance, and perquisites. It is one headline annual figure used in offer letters and budgeting.
CTC structures historically minimised “basic” to reduce statutory contribution bases. The deemed-wages 50% rule now recomputes gratuity, PF and leave-encashment liabilities off the same CTC figure, without changing take-home pay.
Why it matters now: an unchanged CTC now carries a higher hidden statutory liability than it did before 21 November 2025. Budget owners need to see the recomputed number, not just the headline CTC.