Cost to company, usually shortened to CTC, is the full annual cost an employer carries for employing someone. It packages cash salary together with the employer's contributions and the value of any benefits into a single figure.
What it means
A CTC package is structured so the employee chooses how the total is split - for example how much goes to a retirement fund or medical aid - rather than those being added on top of a salary. What changes between structures is the mix, not the employer's total cost, which is the point of expressing pay as one number.
Where it fits in
CTC sits above gross remuneration: it includes employer UIF and SDL, employer retirement and medical contributions, and the taxable value of benefits like a company car. Payroll unpacks the CTC into its components each period, then taxes and pays each according to its own rules.
Key rules
- The employer's total annual cost, not the employee's take-home pay.
- Bundles cash pay, employer contributions and the value of benefits.
- Restructuring the split changes tax and net pay but not the employer's total cost.
- Net pay is always lower than CTC once PAYE, the employee's UIF and contributions come off.
