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CTC Full Form – What is the Full Form of CTC in Banking


You might have come across the term CTC when you apply for any loan. The representative usually asks for the current CTC and the salary in hand when you apply for any loan but you might be not aware of the full form of this term. So, the full form of CTC is Cost to Company and it is calculated on an annual basis. It is important for every applicant to know the CTC full form and a CTC and a salary are not the same. Salary is a part of CTC but it is not the actual CTC. Cost to Company is the yearly expenditure incurred on an employee. It includes the basic salary that is the salary in hand and other benefits that are given to the employee. The additional benefits in a CTC can be EPF, Gratuity, House Rent Allowance, Medical Insurance, Food Coupons, Travel Expenses, and many others.

Elements of CTC

You can explore the various benefits that are included in a CTC:-

  • Basic Pay
  • Dearness Allowance
  • Incentives
  • Bonus
  • House Rent Allowance
  • Conveyance Allowance
  • Leave Travel Allowance
  • Medical Allowance
  • Telephone and Mobile Phone Allowance
  • Vehicle Allowance
  • Special Allowance

Formula for Calculating CTC

CTC= Gross Salary + All other Benefits

Suppose you are getting a Salary of ₹50000 per month and a medical insurance benefit of ₹10000 per month then your CTC will be ₹60000 per month and ₹7.2 Lacs in a year.

Cost to Company Breakup

You can see the benefits that are included in CTC:-

Basic Salary

The basic salary is the largest part of the salary structure. It comprises 40% to 45% of the CTC. Then other benefits are added to the basic salary to compute your Net Take Home Salary.


HRA is the house rent allowance given to the employee to manage his living and accommodation expenses. If the employee is living on rent then the company gives the allowance to manage the expenses for accommodation. This allowance is added to the Net Take Home Salary.

Medical Allowance

The company gives a medical allowance to manage the expenses for the medical treatment. This allowance is fixed and it is added to the Net Take Home Salary.

EPF Contribution

The EPF contribution is 12% of the basic salary and the dearness allowance and it is contributed to the Employee’s EPF Account. This amount is not added to the Net Take Home Salary.


So, whenever you are applying for any loan and the representative asks you to tell your salary then you should tell him the net take-home salary and not the CTC. The CTC full form is the cost to company and the full form clearly defines that it is not the net salary whereas the bank will give you a loan on the basis of net salary and not the CTC.


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