When it comes to running a business, one of the most important expenses is employee compensation. These costs, known as cost to company (CTC), go beyond just salaries and include various other benefits and expenses. For businesses, understanding and efficiently managing CTC can have a direct impact on growth and profitability.
In this article, we’ll go through the essentials of CTC — what it is, how it's calculated and how it differs from gross and net salary.
What are the cost to the company (CTC)?
Cost to Company (CTC) is the total annual cost incurred by a company for one employee. This figure includes more than just base salary — it covers the full range of financial benefits and allowances provided to employees. Essentially, CTC is the cost of hiring and retaining talent in your organization.
By taking the CTC into account, companies get a more comprehensive view of how much they are really investing in their employees. This is important not only for budgeting, but also for evaluating the return on investment (ROI) of their talent acquisition and retention strategies.
The differences between CTC, gross salary and net salary
At first glance, CTC may seem similar to gross salary, but they differ and are calculated in different ways.
Gross salary is the total cash earnings an employee receives for their work in a given period, usually monthly. The components of gross salary include the base salary, allowances and other cash earnings that the employee receives for their work.
CTC, on the other hand, refers to the total expenses incurred by the company on behalf of the employee as compensation. The CTC covers a wider range than the gross salary and is not limited to the amount of the employee’s salary. In short, the CTC includes not only cash but also benefits in kind for an employee.
For example, training provided by the company to an employee is a company expense and is included in the CTC, but is not part of gross salary. The same applies to reimbursements claimed by employees for work-related purchases or services.
But what about the net salary? Like gross salary, net salary is also different from CTC. Net salary is the employee's earnings after deductions such as income tax and social security contributions.
To summarize, the CTC differs from both gross and net salaries. Gross and net salaries represent the employee's cash earnings for their work in a given period, while CTC is the company's total expenditure on an employee in a year, including salary and non-salary components.
Components of the CTC
Several components are taken into account when calculating the CTC. These components are usually calculated for a year but can be adjusted according to company policy.
Here are some components of the CTC:
Base Salary
The first component is the base salary, which is the fixed monthly salary an employee receives. The base salary remains the same each month, although it may change with salary increases. An employee’s base salary varies depending on their position and contract with the company.
Allowances
The second CTC component is employee allowances. Allowances are income other than salary that employees receive for their work. They can be paid regularly (monthly) or irregularly (at certain times).
Examples of allowances for employees are
- Travel allowance
- Meal allowance
- Health allowance
- Religious holiday allowance (THR)
- Overtime allowance
Bonuses and incentives
The third component of the CTC is bonuses and incentives. These are expenditures made by the company to reward employees for their performance. Employees generally receive bonuses and incentives when they achieve company targets or performance objectives.
Benefits for employees and facilities
In addition to cash compensation, companies also offer employee benefits and facilities to enhance employee well-being and improve the company’s image to attract new talent. Examples of employee benefits and facilities include:
- Paid annual leave
- Health insurance
- Pension benefits
- Employee training
- Reimbursement of expenses for employees
Company contributions to mandatory deductions
Some parts of salary deductions must be paid by the company. For example, for the National Health Program contribution (BPJS Kesehatan), which costs 5% of an employee’s salary, the company pays 4% while the employee contributes 1%.
How to calculate the CTC
To calculate the CTC, a company can add up the total expenses for an employee over the course of a year. This can be a challenge as the costs for each employee are different. However, the company can use a general formula to calculate the CTC as follows:
CTC = gross salary + benefits + contribution to deductions
This formula helps companies calculate an employee's CTC. Once the gross salary data is available, the next step is to add the benefits and deduction contributions.
Example for the calculation of an employee's CTC
Ani’s monthly base salary is Rp7,000,000. During the year, she receives allowances and other income totaling Rp30,000,000. According to this data, her total gross salary for the year is:
Ani’s gross salary = (Rp 7,000,000 x 12) + Rp30,000,000 = Rp114,000,000
In addition, the company provides Ani with numerous benefits amounting to Rp30,000,000 per year and contributes to the deductions Ani has to pay, including BPJS Kesehatan and the Employee Security Program (BPJS Ketenagakerjaan), amounting to Rp6,000,000 per year.
With this information in hand, Ani is now able to calculate her CTC:
Ani's CTC = gross salary + social benefits + contribution to deductions
= Rp114,000,000 + Rp30,000,000 + Rp6,000,000
= Rp150,000,000
Manage your company expenses more efficiently with Aspire
Since the CTC is an important expense, it must be managed properly and efficiently. This is essential to optimize costs and achieve the company's goals. For effective expense management, you can rely on Aspire.
With Aspire, you can easily manage your corporate expenses from a single platform. Whether it’s employee-related or other company expenses, you can manage them more efficiently.
Aspire also helps you issue and send invoices to clients. You can manage invoices and business receivables in a more practical and time-saving way.
There’s much more Aspire can do to help your business grow. Want to find out more? Contact our team now!
Frequently Asked Questions
How can Aspire support the unique financial needs and challenges of mid-sized businesses?
Aspire offers a comprehensive suite of expense management solutions tailored for mid-market companies. This includes sophisticated corporate cards, advanced budget controls, and streamlined claims and approval policies, all designed to enhance financial efficiency.

How quickly can a mid-market company integrate Aspire's solutions into existing systems and workflows?
Integration with Aspire's expense management solutions is swift and seamless. Mid-market companies can swiftly implement corporate cards with tailored features, set up nuanced budgets, and establish streamlined claims and approval processes, ensuring minimal disruption to existing workflows.

How does Aspire compare to competitors for international money transfers?
Aspire excels in international expense management with FX fees up to 2x cheaper than traditional banks.
Global payments are offered by various providers through business accounts. Read our article to know more about types of business accounts and how to choose the best one for your business. There are many banks and fintech companies offering business accounts to businesses in Singapore. We have covered them all in our blog, you can click the links to view accounts offered by various banks such as DBS, OCBC, Maybank etc.
However, if you are a start-up or a growing business, chances are you may not meet the eligibility criteria for most of these banks or find their charges to be expensive for your liking. You can consider opting for Aspire multi-currency account for global payments which offers you all the benefits, with eligibility criteria which are less stringent. Read our article on bank charges in Singapore for a quick and easy comparison.

What level of customization does Aspire offer to meet the specific financial requirements of mid-market clients?
Aspire understands the diverse financial needs of mid-market clients and provides a high level of customization to tailor solutions accordingly. This includes the ability to customize corporate cards with specific spending limits, rewards, and benefits that align with the unique requirements of each client.
Additionally, Aspire's budgeting features are adaptable to accommodate the distinct financial structures of mid-market enterprises. The platform also allows for fine-tuning approval policies, ensuring they align with the specific workflows and compliance standards of individual mid-market businesses. This commitment to customization empowers mid-market clients to optimize their expense management in a way that best suits their financial goals and operational preferences.

Is there a minimum balance required for Aspire Business Accounts?
No minimum balance is required to keep your SGD, USD, EUR, GBP and IDR Accounts activated.

Can Aspire's corporate cards be customized to cater to the specific needs of consulting teams on the go?
Yes, Aspire's corporate cards are highly customizable. Consulting teams can benefit from tailored spending limits, travel-centric perks, and real-time transaction tracking, ensuring that the cards meet the unique requirements of professionals on the move.

How does Aspire support budget management for consulting projects and travel expenses?
Aspire's platform offers sophisticated budget controls that consulting companies can adapt to project-specific needs. This includes setting project budgets, tracking expenditures, and receiving real-time insights to ensure that expenses align with project goals.

What are Aspire Corporate Card FX rates?
At Aspire, we want you to pay the lowest rates in the market.
- Zero card activation fees
- Zero card transaction fees
- Best FX rates, up to 2x cheaper than banks

How does Aspire help consulting companies enforce expense policies and approvals for travel expenses?
Aspire streamlines the claims and approval process, allowing consulting companies to establish and enforce expense policies seamlessly. Customizable approval workflows ensure compliance with company policies and industry regulations.

Is Aspire's platform scalable for consulting companies of varying sizes?
Yes, Aspire's platform is scalable and caters to consulting companies of all sizes. Whether you're a boutique consultancy or a larger firm, the platform's features can be adapted to meet your specific travel and expense management needs.

How can I open a business account in Singapore?
For a business account in Singapore, Aspire is an excellent choice. With a focus on startup and SME needs, Aspire offers a seamless and transparent banking experience.
Benefit from their user-friendly online platform, no minimum balance or account opening fees, and dedicated support for businesses of all sizes.
Aspire is designed to streamline your financial management, making it an ideal partner for entrepreneurs in Singapore.

How long does it take to open an Aspire business account?
Registration with Aspire takes less than 10 minutes which you can do via our website or mobile app.
Once registered, we will get back to you within 5 business days on whether your account has been activated or if we need further documents from you.
Our account verification process varies according to the nature of your business. In exceptional cases, it can take up to 7 days to process your documents.

How can Aspire's corporate cards benefit my startup?
Aspire's corporate cards offer a range of benefits for your startup. Earn 1% unlimited cashback on qualified spends, simplify expense management, enjoy streamlined transactions, and gain real-time insights into spending. With customizable limits, integration with accounting software, and enhanced security features, Aspire's corporate cards are designed to empower your startup's financial efficiency and provide added convenience for your team.

Is Aspire suitable for both early-stage and established startups?
Absolutely, Aspire caters to the needs of both early-stage and established startups. Whether you're just beginning your entrepreneurial journey or have an established business, Aspire offers tailored financial solutions to help streamline your operations.
From managing expenses and optimizing workflows to providing valuable financial insights, Aspire's platform is designed to adapt and scale with your business as it grows. The flexibility and scalability of Aspire make it a suitable choice for startups at various stages of development.

Is there a minimum balance required for Aspire Business Accounts?
No minimum balance is required to keep your SGD, USD and IDR* Accounts activated.
However, we recommend keeping your subscription plan amount available on your balance to ensure you're up to date with your payment every month.*
To create a recipient or make any transaction on your IDR Account, you'll need to have a minimum balance of IDR 10,000 on your account.
