Is Gratuity Mandatory in CTC? Seeking Clarity on Employer Obligations After 5 Years

Hi,

I have a query. If an employer does not include Gratuity as part of CTC and the employee has completed at least 5 years of service, and the employer has not made any contributions every year, how do you calculate Gratuity? Will it be limited to the formula: Last drawn basic x number of years of service x 15/26? Should gratuity be a mandatory debit for the employer every year for all employees? I would appreciate some clarity on this concept.

Thanks!
Sharon

Hi Sharon,

It depends; some employers include CTC, and some don't. You can calculate it using the formula.

Regards,
Sanjukta