Confused About Gratuity Deductions? Why It's Missing from My Payslip and What to Do

Hi, my basic pay is 7500 with a grade/perquisite allowance of 10989. My company will deduct gratuity yearly, and it is applicable from day one. However, this has never appeared on my salary slip.

My Questions Are:

1. As my basic is only 7500, do I need to pay for gratuity?
2. The monthly deduction comes to 450 Rs. Why is it not mentioned on my payslip? Do I need to raise a voice?

Thank you.

Gratuity is not deducted from employees. This is a benefit given as per the statute by the company when an employee leaves the organization after completing 5 years of continuous service.

Normally, the employer shows gratuity/PF/other benefits as a part of CTC and not as part of the monthly salary. Therefore, in your case, gratuity must be included in the CTC, which is a cost to the company.

As a result, it will not be reflected in the salary slip.

Regards,

Understanding Gratuity Deductions

Hi Himanshu,

Gratuity is paid by the employer to an employee for long-term good conduct, where long-term service means 5 years. The contribution is made wholly by the company (hence included in your CTC) and is payable to you only when you resign or retire after serving a minimum of 5 years in the organization. Until that time, the accrued amount is kept safe with the employer or a third party like LIC.

The gratuity amount wouldn't be reflected in your salary slip; it would only be there in your appointment letter. Check if the breakdown is given.

In case you leave the organization before 5 years, you do not get it. You should have at least worked for 4 years and 8 months to round it off to 5 years. Every 6 and more months after 5 years would be rounded up, and a month less than 6 would be rounded down.

I hope your doubts are cleared.

Regards