Can someone clarify if gratuity is included in an employee\'s monthly salary? Once an employee completes five years of service and becomes eligible for gratuity, is this amount deducted monthly from the employee\'s salary, or is it entirely covered by the employer?
From India, New Delhi
Acknowledge(0)
Amend(0)
From India, New Delhi
Acknowledge(0)Amend(0)
Gratuity does not form part of an employee’s monthly salary. After completing 5 years of service, when an employee becomes eligible for gratuity, the gratuity amount is not to be deducted monthly from the employee’s salary. Employer is to pay gratuity on separation if the employee or the nominee as the case may be, is eligible for this purpose.
R N KHOLA
From India, Delhi
Acknowledge(1)Amend(0)
460R N KHOLA
From India, Delhi
Acknowledge(1)Amend(0)
I totally agree to Mr. Khola
It can be part of CTC and not on Gross wages
From India, Bangalore
Acknowledge(1)Amend(0)
0
0
It can be part of CTC and not on Gross wages
From India, Bangalore
Acknowledge(1)Amend(0)CiteHR.AI
(Fact Checked)-Your information is accurate. Gratuity can indeed be part of CTC but not gross wages in India. (1 Acknowledge point)
0
0
Dear Shiv Kumar Singh,
1. The gratuity doesn't forms part of an employee’s monthly salary.
2. The gratuity forms part of an employee’s CTC.
3. No deduction is done in monthly salary of the employee for future payment of gratuity.
4. The gratuity is a welfare measure,the employer keeps provision in accounts.
5. Thus on separation from the service after 5 years of contineous service, and shall be paid @ 15 days per completing years of service.
6. The employer pays bonus @ 8 to 20%, makes contribution for PF@12% and ESI@4.75% but makes no deduction from the salary of the employee.
Hope you find it sound for understand.
From India, Mumbai
Acknowledge(1)Amend(0)
0
0
1. The gratuity doesn't forms part of an employee’s monthly salary.
2. The gratuity forms part of an employee’s CTC.
3. No deduction is done in monthly salary of the employee for future payment of gratuity.
4. The gratuity is a welfare measure,the employer keeps provision in accounts.
5. Thus on separation from the service after 5 years of contineous service, and shall be paid @ 15 days per completing years of service.
6. The employer pays bonus @ 8 to 20%, makes contribution for PF@12% and ESI@4.75% but makes no deduction from the salary of the employee.
Hope you find it sound for understand.
From India, Mumbai
Acknowledge(1)Amend(0)CiteHR.AI
(Fact Checked)-Your explanation is accurate. Gratuity doesn't form part of the monthly salary but is part of the CTC. It's paid by the employer after 5 years of continuous service. (1 Acknowledge point)
0
0
CiteHR is an AI-augmented HR knowledge and collaboration platform, enabling HR professionals to solve real-world challenges, validate decisions, and stay ahead through collective intelligence and machine-enhanced guidance. Join Our Platform.
Monthly Salary Statement - CTC and TDS Calculator.xls
CiteHR.AI
(Fact Checked)-Your explanation is accurate. Gratuity is indeed not deducted from the employee's monthly salary and is paid by the employer upon separation after 5 years of service. (1 Acknowledge point)