You have received an offer letter from one of the reputed company. There are many terms mentioned in the offer letter and it is not quite easy to understand them. It is difficult to find a person who has not faced this problem in their career. The reason is basically the jargon used by the recruiters while issuing the offer letters and most of us do not understand it.
But few things you should know before accepting an offer letter. What are these terms - Basic Salary, Gross Salary, Net Salary, and Cost to company
Basic Salary
It is the pay that you get without considering any other benefits such as PF, medical premium and other allowances. This is a part of fixed compensation and does not change.
Gross Salary
It is the pay that you get in monetary terms. It includes basic salary, bonus, allowances, and overtime income. It does not include non monetary benefits like training cost, retirals, gratuity etc. Gross Salary is computed before tax is deducted.
Net Salary
This is the amount which is credited to your account every month. Every employee always considers the Net Salary or in hand salary or take home salary, the most important aspect in employee compensation. Always check with your recruiter what will be your net salary or in hand salary.
Cost to Company
Cost to Company is the total cost incurred by an organization is spending towards their employee including the Salary, Perquisites, benefits, training, retirals, Contributions made by the company, gratuity etc. In a nut shell, CTC is monetary benefits + non monetary benefits.
Now that you are aware of these terms, ensure to double check the Basic Salary, Gross Salary, Net Salary, and Cost to company mentioned in the offer letter before accepting employment.
But few things you should know before accepting an offer letter. What are these terms - Basic Salary, Gross Salary, Net Salary, and Cost to company
Basic Salary
It is the pay that you get without considering any other benefits such as PF, medical premium and other allowances. This is a part of fixed compensation and does not change.
Gross Salary
It is the pay that you get in monetary terms. It includes basic salary, bonus, allowances, and overtime income. It does not include non monetary benefits like training cost, retirals, gratuity etc. Gross Salary is computed before tax is deducted.
Net Salary
This is the amount which is credited to your account every month. Every employee always considers the Net Salary or in hand salary or take home salary, the most important aspect in employee compensation. Always check with your recruiter what will be your net salary or in hand salary.
Cost to Company
Cost to Company is the total cost incurred by an organization is spending towards their employee including the Salary, Perquisites, benefits, training, retirals, Contributions made by the company, gratuity etc. In a nut shell, CTC is monetary benefits + non monetary benefits.
Now that you are aware of these terms, ensure to double check the Basic Salary, Gross Salary, Net Salary, and Cost to company mentioned in the offer letter before accepting employment.
Ishita Sharma has rich experience in the field of investments. She writes articles on investments and also reviews investment related articles. For more information on various investments visit - http://www.investmentbazar.com
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