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Is Gratuity part of the CTC - please confirm
From India, Mumbai


The answer is NO.

Gratuity is paid over and above the normal salary. It is paid in recognition of long and meritorious services, rendered by the employee for a continuous period of 5 years and above.

Many Employers opt for Group Gratuity Insurance Pan to take care of the sudden Gratuity liability of the Organisation. Accordingly as per the terms of the Group Gratuity Policy, the Employer makes annual contributions to protect the gratuity benefit. Employer in order to project the total cost incurred for an employee add a value in the CTC of the employee ( calculated on per employee basis) which is shown as Gratuity. This doesn't mean that employer is deducting Gratuity from Employee salary but the same is only for CTC projection.

In case the employee completes 5 years of continuous service at the time of separation employer pay the Gratuity through insurance company. In case of resignation before the completion of 5 years then employee will not become eligible for Gratuity

From India, Madras

There is no legal definition of CTC. Therefore, it is random vary from organizations to organization. In some organizations Gratuity is part of the CTC and in some others it is not.

CTC as per concept and to my opinion it should be all cost spending by the organization for any employee. All payment and facility are conditionals. Conditions are - gratuity in normal case 5 years continuous service, Salary / wages at the end of the month if the employee is absent throughout the month and no leave in his credit , it will be without pay, Statutory bonus at the end of the year eligibility minimum 30 days present in the year etc. etc.

S K Bandyopadhyay ( WB, Howrah)
CEO-USD HR Solutions
+91 98310 81531

USD HR Solutions – To Strive towards excellence with effort and integrity

From India, New Delhi

Dear Citehr Colleague,

There is no “Yes” or “No” answer. In the corporate sector, to make offers more lucrative or otherwise, there is a practice to write all direct elements of salary components as a part of CTC. Assuming that the employee will continue with the organization for 5 years or more, it is considered a part of CTC. However, a star-marked remark is generally mentioned in the CTC sheet that *Gratuity is payable as per the provisions of the Payment of Gratuity Act, 1972. Hence, if you are going to stay for more than 5 years, you can take it as a part of your total CTC otherwise not.


Dr. Kamlesh Agrawal

From India, Delhi

It cant be a part of CTC, as the gratuity will be paid after completion of 5 years, except in death case, hence, need not be part of CTC. Either employee or employer can give guarantee for five years of continuing service at the time of joining.
From India, Hyderabad

Dear All, Gratuity is not a part of CTC.
From India, Hyderabad
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