Is Gratuity Really Part of CTC if It's Not Paid Annually or Upon Leaving?

sharma.aksh
Clarification on Gratuity as Part of CTC

I just want to clarify that if gratuity is part of the CTC, an employee must receive their gratuity amount upon leaving the company, whether they have worked for 2 years or more than 5 years. I understand that the payment of gratuity is payable upon completion of 5 years of work. However, if the company does not pay it annually or upon departure, should it still be considered part of the CTC?

Regards.
Pragnaa HR Compliance Services
In general, we are thinking that whatever amount is shown in the CTC should be paid to the employee as a matter of rights. I would like to clarify that the term CTC stands for Cost to the Company, as we are aware. This is used by the employer to calculate the total expenses involved in engaging an employee in a particular job profile. I reiterate, the ownership of the term CTC lies with the employer, not the employee.

Therefore, from the CTC, the employee is eligible to receive only the statutory payments as per the applicability of various acts, including Payment of Wages, EPF, ESIC, Bonus, Gratuity, etc.

For example, if I wanted to start a business in a particular place, I would calculate the total expenses involved in this business for the next year, which would include rental, manpower, and other basic expenses. I would derive a total amount as expenses. In the case that I decide to close the business in the middle of the year, should I continue to pay the rent to the landlord just because I had calculated the rent for the entire year at the beginning?

I hope this is clear now.
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