Cost to Company vs Basic Gross Salary Offers

All too often we are so eager to leave our current employer that we don’t think too deeply about the financial implications of various salary packages on offer from prospective employers.  Make sure you understand these properly before applying for a new position.  There is nothing more frustrating for a prospective  employer than when a specific salary is advertised or offered, the potential employee accepts this at interview stage, and then at offer stage decides it actually is pretty much in line with what they currently earn.   And the negotiations start.

Some employers will not be open to negotiation, and some will.  It really does depend on your level of expertise and skill set.  However, it is always a very good idea to make sure you are 100% certain of your salary requirement before going for an interview.

Moving from a company where there are no benefits on offer to a company where you will be receiving benefits as part of your salary package, is a prime example of how this can go very wrong for you, the applicant.   Always ask the following questions with Cost To Company packages on offer:-

  1. What are the benefits contributed by the company that make up the Total Cost To Company (TCTC) – ask for the percentages?
  2. What comes off my Basic salary (this is the salary on offer prior to benefits added on)?  i.e. UIF, PAYE, your portion of Medical Aid, Pension?
  3. What is my average Nett (take home) salary?

Cost To Company (CTC) salary packages include all costs to the company for employing you (i.e. their portion of the medical aid contribution, pension fund, travel allowance, cell allowance, and so forth).  This is usually broken down for you to see at offer stage.  When you see an advert or speak to an agent about a CTC salary, make sure you are very clear about your bottom line, take home salary before applying for the position.  Negotiating at a later stage is not always advisable.

Happy job hunting!

By Ronel Irvine, Talent Acquisition Specialist