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I am going to join a new company, so I wanted to give my CTC1 details to them. In my current company I am getting a salary of sum of Basic & Variable pay, where variable pay depends on how many hours I effectively worked for the company.

Until 2 months ago, I had been getting almost the full amount of variable salary, since we had a lot of projects. Now condition have changed, and only 2 or 3 projects are running, and I've been getting much less variable pay for the last 2 months.

Suppose this example:

Monthly Salary details:
Basic Pay: 1500
Variable pay : 8000 for 166 hours per month
For an hour : 48.17

Total salary : 15000 + 8000 = 23000
For a year : 23000 * 12 = 2,76000

Total salary without Variable : 15000
For a year : 15000 * 12 = 1,80000

At a condition I worked less [suppose 83 hours]

Variable Pay : 4000
Total salary : 15000 + 4000 = 19000
For a year : 23000 * 12 = 2,28000

So which one should I provide to them? Also I have to provide my last 3 months of pay slips to them.

1Cost to Company is a term used in India to indicate the total cost of an employee to the company including things like salary, taxes, bonuses, and other benefits

  • Why do they need it? – Neuromancer Dec 6 '13 at 13:28
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    I am quite certain this is a very india-specific issue, and I would be hesitant to suggest non-india-specific solutions as this may be common practice (and unavoidable), and rather a matter of how to properly calculate it, rather than how to convince the employer that it isn't necessary. This is well within the scope, but beyond my understanding (I searched the net, but couldn't find a good answer). If another Indian contributor could shine some light, it would be very helpful. Anyone know one? – jmac Dec 6 '13 at 13:49
  • @JimG. I don't think it's really a duplicate. The question you've linked is about whether to provide salary information at all. This question accepts that information will be provide, but asks about level of detail/different models. – yoozer8 Dec 6 '13 at 14:56
  • And would the average employee even know there actual cost? overheard rates can very wildly and at the ultra high end can approach 500%-700% if you working at the bleeding edge. – Pepone Sep 23 '14 at 19:01
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Maybe this is a local custom, if I were asked to show the paychecks from my previous employer, I'd be freaked. That's none of their business, that's between me and my previous employer. But if it's common where you live, I guess you just show them your last paychecks and if they differ your employer may want to know why, so you may want to simply send the formula.

If you are unsure how to do that, it would be best if you ask them. If your employer needs that, they will know what format is best.

  • so is there anything wrong with telling them total amount [with full variable pay] as my current CTC? – asitis Dec 6 '13 at 8:43
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    The point of my answer is: I can't tell. Other people on the internet can't tell. Ask your employer what he needs. Only he knows. – nvoigt Dec 6 '13 at 9:45
  • Hi, am not in a situation to refuse their request to provide salary pay slips. So that options is not possible in my case. – asitis Dec 9 '13 at 5:53
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It is a common practice here in India to show the total possible cost for yourself as the CTC. This cost is not what you get in hand or not what you get on the salary slip but what you were offered in your offer letter or increment letter.

Take the following example:

Basic pay: 5,000
All allowances: 8,000
(like House rent allowance, Travel allowance, Dearness allowance, Medical allowance)
Employer's provident fund contribution: 2000
---------------------------------------------
Total basic (fixed) monthly pay: 15,000
Total basic (fixed) annual pay: 15,000 x 12 = 180,000

Annual bonus (pro-rated): 18,000
Insurance permium (life cover, health cover, etc.): 10,000
------------------------------------------------------------
Total annual variable: 28,000

Overtime (if applicable): 100 per hour

Considering this example, your projected annual cost to the company would be:

180,000 (fixed) + 28,000 (variable) = 208,000

And you have to mention the overtime rates separately.

When you provide your salary slips, all the fixed components are mentioned on it, along with the overtime. You don't have to include overtime in your CTC as it is already covered in the salary slips. The companies in India make offers based on verified salary slips and not on what CTC amount you tell them. If your salary slip shows overtime income more than your basic pay, the new employers would make an offer accordingly. Furthermore, you can always negotiate your salary before a formal offer is made.

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As a non-Indian I don't know if the formula to caluculate this is standard or company specific but either way HR will have the answer. When you ask them just say that your pay varied month to month depending on your project load and you would like to know how many months should be factored into this calculation. If this isn't a standardized thing you probably don't want them to knowing how to influence the results.

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I would suggest a six month average, or even a one year average if your work has seasonal fluctuations. Provide pay slips for the period you average, if you must do so. Then explain what you're doing and why - that your work fluctuated and you wanted to give them a complete picture.

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Having read a definition of CTC and its components, I'm going to say that you have to ask your current HR for an official breakdown. For example, some of the things included are Office Space Rent, Incentives or bonuses (which might include your variable pay), and Income tax savings. There's no way for you to know what the company is spending on your office space, without asking them. You might not be able to tell what tax-free benefits you're getting that they're covering the tax on. And so on.

The only way to get a solid CTC is to ask.

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