Dear Professional Colleagues, I need clarification and guidance on the following point: Is there any instance in industry circles where gratuity payable under the Payment of Gratuity Act, 1972, has been paid along with the monthly salary to employees to absolve the gratuity liability by the employer? Bonus in some industries is paid as a monthly salary/wage component. Likewise, can gratuity also be paid is my question.
Gratuity as Part of CTC
It is well known that gratuity becomes part of CTC in most companies, but can it be paid along with the monthly salary of the employee?
From India, Bangalore
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1Gratuity as Part of CTC
It is well known that gratuity becomes part of CTC in most companies, but can it be paid along with the monthly salary of the employee?
From India, Bangalore
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Gratuity and Bonus Payment Guidelines
Gratuity is a terminal benefit and cannot be paid along with the monthly salary. It is payable after continuous service of 5 years and is exempted under tax law.
Similarly, the bonus under the Payment of Bonus Act (Profit sharing) can be paid only when the establishment earns a profit for the accounting year, paid annually. However, if any other bonus in lieu of a profit-sharing bonus is paid, then the same can be paid along with the monthly salary. Gratuity cannot become a part of Cost to the Company. It can form a part of CTC only after 5 years of continuous service.
From India, Madras
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Gratuity is a terminal benefit and cannot be paid along with the monthly salary. It is payable after continuous service of 5 years and is exempted under tax law.
Similarly, the bonus under the Payment of Bonus Act (Profit sharing) can be paid only when the establishment earns a profit for the accounting year, paid annually. However, if any other bonus in lieu of a profit-sharing bonus is paid, then the same can be paid along with the monthly salary. Gratuity cannot become a part of Cost to the Company. It can form a part of CTC only after 5 years of continuous service.
From India, Madras
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