In our company we mention Gratuity amount as part of Annual CTC in both offer and Appointment letter.
We used to mention in the offer letter that Gratuity is payable as per the Payment of Gratuity Act (with asterisk), however in recent case one of our employee is claiming that as Gratuity amount is mentioned in the offer, hence it is be paid irrespective of employee serves less than 5 years or completes 5 years.
Please let me know your opinion for the following questions
1. Did Gratuity is payable before completion of 5 years to the employee, if Gratuity amount is mentioned as part of annual CTC ?
A. Anand

From India, Chennai
Labour Law & Hr Consultant
Insolvency N Gst Professional
Gayatri P
Hr Generalist
+1 Other

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Dear Anand,
If one understands the purpose behind the projection of CTC in a job offer/ appointment letter and the difference between the gross salary mentioned and the corresponding proportionate amount of CTC projected therein, one can find himself/herself the correct answer for such a query relating to any such statutory fringe benefit that would come to fruition subject only to the conditions mentioned in the respective Law.
In short, CTC comprises of the cost of labor actually payable to an employee as per the contract of employment and the cost of retention of labor to be incurred by the employer both as per the contract of employment and his statutory obligations. Therefore, the mere mention of a statutory fringe benefit like gratuity in the CTC does not obligate the employer to pay when the conditions for such payment stand unfulfilled by the employee.

From India, Salem

Dear Anand,
The Gratuity is a part of CTC for all employer. The employer makes provision in their books of account accordingly and gratuity is paid when it due.
The employee is eligible for gratuity on completion of 5 years of service( if leaving the job or super annuation or death) as the case may be.
1. Did Gratuity is payable before completion of 5 years to the employee? Ans: NO
2. Gratuity amount is mentioned as part of annual CTC ? Ans: Has got no meaning

From India, Mumbai
Dear Mr Anand,
I faced a similar situation in Haryana. If Gratuity is part of CTC, it becomes payable as non e of the benefits mentioned in CTC are supposed to be deducted, instead some are payable immediately and some are payable at a later stage.
As per the discussions with Labour offficers and fraternity the same becomes payable once quantified as part of CTC.
I paid and I was also paid in same fashion.
Raman Sachdeva

From India, New Delhi

Dear Mr Raman, I dont think the payment was in order. Just because it was mentioned in CTC does not make it authorised unless other conditions surrounding the entitlement are also fulfilled.
From India, Pune

Dear Raman,
I am not able to understand the logic behind your crisp answer. I shall be much obliged if you present the reasoning given by the Labor Officers and the fraternity with whom you discussed the issue. As far as I understand, no statutory benefit becomes automatically payable just because it stands mentioned in the C.T.C unless the statutory conditions for the same are fulfilled. Your personal experience may be an exception but no exception can be a rule.

From India, Salem
gayatri p

You can put a note below your CTC structure mentioning that Gratuity will be payable as per the prevalent regulations/statute. This will help you in case of any queries in future from the employees.
Warm regards,

From India, Mumbai

Dear All,
There is no need to mention bonus and gratuity amount as part of ctc in the offer /appointment order. if in any case or under the existing practice of organization, you have to mention the bonus and gratuity in the offer/appointment order as part of ctc then you should mention in the foot note in the order that the gratuity will be payable as per the Gratuity Act or completion of five years of continuous service that is to say-four years and 240 days complete in the fifth year.the bonus also will be payable as per the bonus Act. In case the employee is exempted as per the Act at the time of payment of bonus .the bonus shall be payable.if nothing is specifically mentioned in the foot notes regarding payment of bonus and gratuity in the appointment order the gratuity is payable whether the employee has completed continuous service of five years or not.
Prithvi Singh Yadav
(Newerahr Management Consultancy)
Gurugram HR.
Contract no 9818713357,email

From India, New Delhi
I have a small query about the Payment of Gratuity, i worked with a Company last 5 year 6 month and 6 Days
My Date of Joining is 29 oct 2012 and last date of Working is 05 may 2018
Basic + DA is Rs 34912,
Kindly Calculate the amount as per the Payment and gratuity Act Compliance
My Query is they are providing me the Payment of gratuity with the calculation of 5.52 years but as per my Knowledge
They should be paid my 6 years of gratuity for my tenur,
Kindly Clearly, they are complaint or non complaint

From India, Kolkata
Dear All, in My company There is an employeee whos is not completed one year in our organization and passed away.. i just need to ask is gratuity is applicable. He worked 4 month only with us.?
From India, Kolkata

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