Tuesday, February 27, 2024
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Fooler’s Paradise


By Prakriti Kohli

While campus placements continue to create a hierarchy of the bad, good and brilliant students in the form of the package they crack, most students are ignorant to the fact that the salary of most of the students touted as a failure at campus placements is not really different from that of the bright students, who paved their way into a top notch companies with as many rounds of interviews as their shoe size.

CTC or ‘Cost to Company’ is what a company spends on you. If something is an expense for a company because of you, its part of your CTC. Read on to get juicy bits on how companies try to fool prospective employees by mentioning the Cost to Company (CTC) in a malicious manner.


Trap 1: Including the EPF share in the CTC

Companies add the employer’s share of the EPF to the salary of the employee when it does not even belong to the employee. This is just a trick to make the salary of the employee rosier and sound better. If the employee divides his salary by 12, he will see that the CTC has many other things added apart from the monthly salary the employee receives.

Trap 2: Adding joining bonus to CTC

Companies follow the malpractice of adding the one-time bonus to the CTC making it look really handsome whereas the CTC stated is only for the first year where the bonus is actually paid and lesser for the subsequent years thus removing a large part from the salary paid to the employee.

Trap 3: Adding miscellaneous facilities to the CTC

Payments towards food coupons to an employee, life and medical insurance are not received in cash, but as benefits often called perquisites. The company adds all this to the CTC by the justification that it is in the form of an expense for the company.

Trap 4: Adding variable components to the CTC

Mostly all the salaries that are received by employees all over the world from corporations has a fixed and a variable component. Usually the fixed component is small and there is a large component of variable component. For example if your CTC was Rupees 10 lakhs, it could happen that 4 lakhs of the CTC would be fixed, and the remaining 6 lakhs would be variable. The part of the variable component ultimately paid to you could go down or up depending on your performance or some parameter that supposedly would be under your control. It could be sales, the number of clients you bring in etc.

So the next time a company comes to your campus and tries luring students on its 7 digit package, step forward and take a look of what the breakdown of the CTC is!

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