Dear Friend,
The business is the game of cost, which finally end up with either profit or loss. The CTC is nothing but hypothetical cost it includes every thing we receive directly or indirectly this may be in cash or kind or services.
The Gratuity is one of the cost has to be incurred per employee by the business house on complition of terms as envisaged under the law/act. This amount is being paid by the business house but not a charity by the propritor.
Now whether the employee will get any amount, if leaves job prior to eligibility for gratuity. Is there any deduction on his monthly salary towards Gratuity? If No, then it is No.
Hope this will clarify your doubts.
From India, Mumbai
581The business is the game of cost, which finally end up with either profit or loss. The CTC is nothing but hypothetical cost it includes every thing we receive directly or indirectly this may be in cash or kind or services.
The Gratuity is one of the cost has to be incurred per employee by the business house on complition of terms as envisaged under the law/act. This amount is being paid by the business house but not a charity by the propritor.
Now whether the employee will get any amount, if leaves job prior to eligibility for gratuity. Is there any deduction on his monthly salary towards Gratuity? If No, then it is No.
Hope this will clarify your doubts.
From India, Mumbai
Dear all,
Ofcourse its repeated subject matter, but still I feel there should be a legislation to favour the employees so that taking shelter under the provisions of the Gratuity Act should be done away with.
Its obvious that every employee's gratuity due on completion of one year of continuous service is taken for the purpose of CTC and accounted in the firm's books as a 'Liability towards the employee' on accrual basis. But at the same time when the very same employee leaves the firm without completing 5 yrs of continuous service, he/she is neither paid what gratuity is accounted for due for his service nor transferred to the subsequent employer like EPF for the simple reason that Gratuity Act does provide for such an arrangement. Thus the employer writes back the unpaid gratuity which in effect "an unjust enrichment" in the eye of law and gets the benefit. Like this the employee is deprived of his just due which is against the principle of natural justice. I strongly feel all the labour/employees organisations should write to the Govt.of India and build up a strong case for bringing in an amendment to this provision paving the way atleast to transfer the accrued gratuity to the next employer if an when he/she joins another firm/employer like being done in case of EPF.
From India, Bangalore
Ofcourse its repeated subject matter, but still I feel there should be a legislation to favour the employees so that taking shelter under the provisions of the Gratuity Act should be done away with.
Its obvious that every employee's gratuity due on completion of one year of continuous service is taken for the purpose of CTC and accounted in the firm's books as a 'Liability towards the employee' on accrual basis. But at the same time when the very same employee leaves the firm without completing 5 yrs of continuous service, he/she is neither paid what gratuity is accounted for due for his service nor transferred to the subsequent employer like EPF for the simple reason that Gratuity Act does provide for such an arrangement. Thus the employer writes back the unpaid gratuity which in effect "an unjust enrichment" in the eye of law and gets the benefit. Like this the employee is deprived of his just due which is against the principle of natural justice. I strongly feel all the labour/employees organisations should write to the Govt.of India and build up a strong case for bringing in an amendment to this provision paving the way atleast to transfer the accrued gratuity to the next employer if an when he/she joins another firm/employer like being done in case of EPF.
From India, Bangalore
Dear Kumar ji,
Already there is a demand by unions to remove the conditions asking (i)to have at least 10 employees in an establishment and (ii) minimum five years of service for payment of gratuity.
Already there are recommendations and proposal for to do away with 5 years service clause for eligibility of Gratuity and transfer of gratuity benefit when an employee switches his jobs.
As per draft code on Social Security and Welfare, Gratuity will be contributory. There will be a contribution of 2% towards Gratuity by every employee and accumulation will transfer when employee switches the job.
From India, Mumbai
Already there is a demand by unions to remove the conditions asking (i)to have at least 10 employees in an establishment and (ii) minimum five years of service for payment of gratuity.
Already there are recommendations and proposal for to do away with 5 years service clause for eligibility of Gratuity and transfer of gratuity benefit when an employee switches his jobs.
As per draft code on Social Security and Welfare, Gratuity will be contributory. There will be a contribution of 2% towards Gratuity by every employee and accumulation will transfer when employee switches the job.
From India, Mumbai
We have been reading certain modifications in the gratuity administration both in govt. and pvt.sector by proposing automatic revision in the upper limit in gratuity linking with wage levels by a new formula. As of now the limit has been enhanced from 10 lakhs to 20 lakhs. And again in Pay Commission recommendations this formula is being highlighted for automatic revision. Learned members may discuss further on this. However I could not see anything tangible taking place on lines indicated as above by Mr.Keshav.
From India, Bangalore
From India, Bangalore
If the Gratuity is considered as CTC and Salary is reduced to the extent of Gratuity deduction, No employee will ever want to complete 5 years for the sake of extra benefit of Gratuity, as and when an employee is leaving the company the deduction will automatically be credited in FnF as Exgratia. Doesn't the Gratuity payment looses its value as it doesn't even matter if its paid after 5 years or before 5 years.
From India, Bengaluru
From India, Bengaluru
Dear Umakanthan Sir,
If CTC is part of gratuity, if the employee has left the job before 5 years, the employer will pay the gratuity amount in full and final settlement or not.
Because employer deducts gratuity from our package.
From India, New Delhi
If CTC is part of gratuity, if the employee has left the job before 5 years, the employer will pay the gratuity amount in full and final settlement or not.
Because employer deducts gratuity from our package.
From India, New Delhi
Dear Devendra,
In fact, your question reflects the general confusion prevailing in the minds of employees whose compensation package is shown by the employers in CTC format. Once again it is to be reiterated and remembered that CTC is only an accounting tool projecting the over all annual expenses to be incurred by the employer in respect of the employee. Both in content and form it is a mere statement of the total annual cost of employment per employee - that's all. As such it implies that the items payable actually in the form of money and/or to be extended in the form of benefits which can be computed in terms of money would materialize only on the fulfilment of the conditions by the employee either statutory or contractual.
If analyzed in this back drop, the actuarial contribution made by the employer to a gratuity fund is an expense from his cost perspective and therefore only shown in the package. No contribution to gratuity is deducted from your monthly salary. Even then you are entitled to it only when you complete not less than five years of continuous service as stipulated in the PG Act,1972.
From India, Salem
In fact, your question reflects the general confusion prevailing in the minds of employees whose compensation package is shown by the employers in CTC format. Once again it is to be reiterated and remembered that CTC is only an accounting tool projecting the over all annual expenses to be incurred by the employer in respect of the employee. Both in content and form it is a mere statement of the total annual cost of employment per employee - that's all. As such it implies that the items payable actually in the form of money and/or to be extended in the form of benefits which can be computed in terms of money would materialize only on the fulfilment of the conditions by the employee either statutory or contractual.
If analyzed in this back drop, the actuarial contribution made by the employer to a gratuity fund is an expense from his cost perspective and therefore only shown in the package. No contribution to gratuity is deducted from your monthly salary. Even then you are entitled to it only when you complete not less than five years of continuous service as stipulated in the PG Act,1972.
From India, Salem
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