What is Total Target Cash?
Total Target Cash (TTC) is a compensation metric in HR that represents the sum of an employee’s base salary and expected variable pay (such as bonuses or commissions) assuming they achieve 100% of their performance targets. TTC applies to roles where a significant portion of pay is performance-based and helps clarify the full cash earning potential of a position.
Why Total Target Cash Matters in HR
This concept is vital for both talent acquisition and compensation design because it provides transparent clarity on what an employee stands to earn if they meet their targets. For hiring managers and candidates alike, knowing the TTC enables more informed decision-making about offer competitiveness and role attractiveness. Additionally, HR teams use TTC to benchmark against market rates, design performance-based pay structures and align compensation packages with business goals.
From the employee’s perspective, TTC helps set realistic expectations and underscores the performance and reward link. From the employer’s angle, it promotes fairness and accountability in pay practices by linking actual cash earnings to measurable outcomes.
How to Calculate and Use Total Target Cash
To determine TTC and put it to use effectively, follow these steps:
- Identify base salary: Determine the annual fixed cash pay for the role.
- Define target variable pay: Quantify any bonuses, commissions or incentives tied to achieving 100 % of performance goals.
- Apply the formula: TTC = Base Salary + Target Bonus/Commission.
- Communicate and monitor: Ensure employees understand how their pay is structured and track alignment to performance outcomes over time.
By anchoring compensation practices around Total Target Cash, organisations can build clear, competitive and performance-aligned pay packages. Ultimately, regularly reviewing TTC ensures your cash-compensation strategy remains market-relevant, transparent and motivating for employees.
