Gratuity in CTC: How Is It Calculated in Your Monthly Salary Slip?

Can gratuity be part of CTC? If yes, then what is the formula used in the monthly salary sheet/slip?

Dear Friend,

Gratuity is not a part of CTC, but many companies do practice adding it. Gratuity is payable after 5 years of continuous service.

Hi Friends,

Nowadays, all companies are including Gratuity as part of the CTC. However, this amount is not paid monthly; it is disbursed only after completing 5 years of service. To calculate CTC, use the following formula in the monthly salary sheet: Gratuity is computed as 4.81% of your basic pay. For example, if your basic pay is Rs. 10,000 per month, Rs. 481 will be allocated monthly to your gratuity fund.

Regards, RameshKumar S Egston Electronics, Trichy, Tamil Nadu, India. 9843110477

Gratuity can be shown in the CTC as it is purely a contribution made by the employer only. However, it need not be reflected in the monthly salary sheet as it does not form part of the monthly salary.