Understanding Gratuity in CTC: How to Calculate and Handle Incomplete Service Periods

Dear HR Gurus,

I have one query: how do you calculate Gratuity in an employee's CTC? In other words, how do you determine monthly Gratuity?

Another question is, if a company includes Gratuity in an employee's CTC but the employee does not complete the Gratuity period, for example, if an employee has worked with the company for 4.5 years instead of the required 5 years, what is the status of his Gratuity?

I am eagerly awaiting your valuable response.

Regards,
Dev

You can take 4.81% (5%) of the Basic Salary to calculate the monthly gratuity of the employee.

Secondly, if a person is not working in an organization for a complete 5 years, he cannot get the gratuity amount, which means his gratuity amount will lapse automatically.

Regards,
PRA