CTC

Cost to Company — the total annual expense an employer incurs per employee, including salary, benefits, and statutory contributions.

Detailed Definition

CTC (Cost to Company) is the total annual cost an employer bears for an employee, encompassing all direct and indirect compensation components. In Pakistan, a typical CTC structure includes gross salary (basic + allowances), employer EOBI contribution, employer PESSI/SESSI/KPESSI contribution, provident fund employer match, gratuity accrual, medical allowance, conveyance allowance, bonuses, and other benefits (meal vouchers, company transport, insurance premiums).

CTC differs from the employee's take-home pay or net salary in two important ways: it includes employer costs the employee never sees (such as employer EOBI and statutory insurance) and it is annualised rather than monthly. A PKR 1,200,000 CTC typically results in a monthly net pay around PKR 80,000 to PKR 90,000 after tax and deductions.

Offer letters usually state CTC prominently because it represents the employer's commitment. Savvy candidates should always ask for a CTC breakdown to see what portion is guaranteed cash, what is variable, and what is non-cash benefits.

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