01/03/2021
WE MUST KNOW...
EMPLOYMENT OFFERD SALARY REPRESENTATION TERMINOLOGY IS CHANGING
CTC offered by someX is 8 LPA per annum spread over 2 years? What will be the in-hand salary? And what is the meaning of spread over 2 years?
This is the latest tactic many companies have started playing. I noticed this thing for the first time when I thought of applying at xyz software company in 2019 since the CTC they were offering was 21 LPA, quite lucrative for someone like me who had six months of experience in the IT field. But it was only later that I got to know the real meaning behind this 21 LPA. This 21 LPA was ‘spread over’ 3 years.
To understand this ‘spread over’ concept, you need to understand what CTC is, first. CTC refers to the cost that the xyz software company is bearing to employ you, which is not necessarily the payment you will receive. If any company is offering 21 LPA spread over 3 years, it means the total cost borne by them to employ someone would amount to 21 lakh rupees in 3 years! Hence the gross CTC falls down to Rs 7 lakh per year, instead of 21.
Later on, I checked that they would be paying 5 LPA in the first year, 7 LPA in the second year, and 9 LPA in the third year, which totals to 21 lakh rupees over the duration of 3 years.
This is the same thing that xyz software company is doing by offering you 8 lakh rupees over a course of two years. Your effective gross CTC will be 4 LPA. And with that figure, you may expect around 26,000–27,000 after deductions in-hand on a monthly basis. This spread over thing is a trick played by many employers to attract the candidates by inflating their CTC