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Ciby John (HR Manager)     07 May 2012

Gratuity applicability

Dear Sirs,

Can gratuity amount be mentioned in the CTC under deferred benefits. There are some companies which do not have have gratuity as part of CTC still they pay when the employee leaves. Which is correct?

Regards, Ciby John.



 2 Replies

Deepak Nair (lawyer)     07 May 2012

gratuity will be applicable to employees only after completion of 5 years in the organisation. Gratuity can be mentioned in the CTC after 5 years.

Kumar Doab (FIN)     07 May 2012

Gratuity is a statutory right of employee. Employee does not have to contribute from his wages. Employer has to contribute without any cost to employee. It is legal requirement .It should have no bearing on the annual pay package of the employee.CTC is annual pay package of the employee.

HR personnel/Managers/Heads need to guide the owners/promoters of the company.

What if the company asks to add proportionate cost of AC to all employees, renewal fo factory licence, mouse catcher, fire fighting equipment etc. 

Gratuity is not assured payment before 5 years.

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