What is Cost to Company (CTC)?
Definition
Cost to company is the total amount an employer spends on an employee, including gross salary plus employer contributions to UIF, SDL, pension fund, medical aid, and other benefits.
Explained Simply
CTC is commonly used in South African job advertisements as the total employment cost. CTC = Gross Salary + Employer UIF (1%) + Employer SDL (1%) + Employer Pension Contribution + Employer Medical Aid Contribution. The employee's take-home pay is always less than CTC because it excludes employer-side contributions and includes employee-side deductions. When negotiating salaries in SA, always clarify whether the figure quoted is CTC, gross, or net.
Related Terms
Gross Salary
Gross salary is the total amount an employer pays an employee before any deductions such as PAYE tax, UIF contributions, pension fund contributions, or medical aid.
Net Salary
Net salary (also called take-home pay) is the amount an employee receives after all deductions — including PAYE, UIF, pension contributions, and medical aid — have been subtracted from their gross salary.
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