Gratuity in CTC: Can You Claim It If You Leave Before 5 Years?

Dear All,

As per the Gratuity Act, an employee should complete 5 years of service to become eligible for gratuity.

If gratuity is defined as an indirect benefit and included as part of the CTC in his appointment order, what are the employee's rights if he leaves the service in his 3rd year? Can he request management to pay the gratuity since it is a part of his CTC?

Prabu

My answer to your query is yes, but generally most companies deny the same. It is illegal because if gratuity is a part of CTC, then it is obligatory for the company to pay the same. Companies take benefit of the 5-year continuous service clause and retain a lot of money from their employees' salaries.

Dear Prabhu,

It is not mandatory for an employer to pay gratuity before completion of five years, even if it is mentioned as a part of CTC.

My gratuity is a part of CTC. Can I claim the amount of gratuity if I left the organization after 2.5 years of service?

I need to know about gratuity. In my company, it is deducted from CTC as per the same formula as put into basic*15/26*1 year. However, as per the Gratuity Act, it is written that gratuity is only calculated when an employee serves for 5 years. Kindly clarify.

Regards

If it is not mandatory for the employer to pay the gratuity amount after the completion of 2 years, can we claim this?

In fact, I am also looking for the same information. In our company, we are practicing the same. So, in this case, can an employee claim the gratuity as it's a part of CTC?

I understand that neither the company nor employee contributes towards gratuity, unlike the PF. Why on earth is gratuity included as part of CTC? As I understand, gratuity is exclusive of the salary the employee receives because of having stayed in the company for more than 5 years. This seems very unfair to the employees. Please shed some light on this.