Decoding CTC: How to negotiate a better salary structure
- Salary slip: A CTC, comprises all the payments and benefits, whether fixed or variable, that an employee is entitled to
Decoding CTC: Evaluating a job offer isn’t always a straightforward task, when it boils down to the CTC (cost to company). Expansively evaluating one’s objectives is key - holistically. Once the employee has established key elements of the offer that they believes deserve change, they need to take a call on the cards they are going to play and the sequence of how one will put their points across, tactfully.
Advising an employee to know the difference between take home salary, net salary, gross salary and CTC, SEBI registered tax and investment expert Jitendra Solanki said, "It has been found that employees become happy after looking at the CTC mentioned in the offer letter whereas they should be interested in looking at the actual take home salary. They must know that CTC is total cost to the company due to an employees recruitment whereas take home salary is CTC minus all deductibles like PF, gratuity, income tax, etc. So, one should also look at the take home salary once the CTC is mentioned."
Solanki said that some companies put their monthly PF contribution in CTC of the employee, which is incorrect. So, while decoding one's CTC, one must make sure that recruiters monthly PF contribution is not mentioned in the CTC. Such practice leads to huge slump in take home salary of an employee.
Atul Pratap Singh, CEO & Co-Founder at Jobsgaar said, "A CTC, comprises all the payments and benefits, whether fixed or variable, that an employee is entitled to."
On how to handle a job interview and get best possible CTC and salary structure, Atul Pratap Singh of Jobsgaar said, "In an aspiring job interview, one should delay the salary discussion, instead prioritise a meatier role over the pay and try making the employer mention his offer first. Furthermore, settling for less and walking away without negotiating will affect one’s entire career, instead it is better to initiate the discussion with a possible figure higher than what one wants in order to have some space to concede later."
Advising an employee to remain insulated from the word play, Jitendra Solanki said, "An employees gross salary includes net CTC minus mandatory contributions like PF, gratuity, etc. whereas net salary means gross salary minus payments done by the company for other benefits like insurance, and other allowances."
On what if an offer is too difficult to accept a salary structure despite lucrative CTC, Vinit Khandare, CEO and Founder at MyFundBazaar said, "Despite employing classic negotiation techniques, if the prospective employer demonstrates ‘inflexibility’ to everything the employee asks for, the employee needs to pay attention to their internal monitoring system. If one’s instincts still say ‘no,’ turn the offer down politely & always leave the door of possibilities of a future association open - be it in the form of potential customers, potential advisors, and perhaps even one’s future employers - we are connected by opportunities."
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First Published:12 Jun 2022, 08:16 AM IST
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