The Full form of CCA is City Compensatory Allowance. CCA is a type of allowance in monetary terms offered by organizations to their employees who work and reside in a city or metro. It mainly intends to cop up the extra expenses incurred in the metro or urban areas. In the present-day competitive scenario, it is pivotal for companies to retain its good employees. Getting higher salary is one of the biggest reasons behind switching jobs by employees. It generally stresses the salary part to a great extent of an individual for maintaining a certain living standard in an urban area or metropolitan city.
Therefore, it becomes essential for a company to ensure that its employee is remunerated suitably. This is also one of the important reasons behind different types of allowances in addition to the basic salary being paid to an employee. So, City Compensatory Allowance or CCA is one of the allowances that are offered to an employee working/living in a Tier-1 city like Mumbai, Delhi, Bangalore, Kolkata, etc. It is also offered for employees working or living in Tier-2 cities as well. CCA is offered completely as per the discretion of the employer. It is calculated as per the pay scale and grade, and not as per the basic salary of an employee. Thus, it varies between one city to another.