|Overview: Cost To Company|
|Function||Human Resource ManagementFinancial ManagementManagement Accounting|
|Definition||The total costs incurred by a business by employee, typically annualized.|
|Value||Analysis of costs|
What is Cost To Company?
John Spacey, updated on December 17, 2016
Cost to company is the total annual cost of an employee including factors such as salary, bonus, stock based compensation, benefits, insurance, taxes, work visa fees and expenses. In some cases, it includes indirect costs such as office space. The use of Cost to Company includes both management accounting functions such as determining the costs of a project and human resources activities such as considering hiring new employees. In either case, it makes sense to consider the total cost incurred as it can be considerably greater than base salary. Most organizations use Cost to Company as an internal calculation that isn't typically revealed to an employee. However, in some countries it is common to define salary terms using Cost To Company.
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