Dear Seniors, Please clarify if the above amount can be a part of the salary. For Instance as below! Basic salary+HRA+Conveyance+PF+ Ex-Gratia = Salary Appreciate an early reply Thanks & Regards, Ss
From India, Madras
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1From India, Madras
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Hi All, the reason for asking this is because my payslip reflects the Ex Gratia payment included with the salary every month. Is this a correct practice by HR? I'd request seniors to give their inputs asap.
Thanks & Regards,
Ss
From India, Madras
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Thanks & Regards,
Ss
From India, Madras
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Ex Gratia cannot be a part of Salary, If I am not wrong Ex Gratia is paid on some occassion showing extra gratitude towards the employees work/job to the employer
From India, Ahmadabad
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From India, Ahmadabad
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Dear Saji, thanks a million for the input. Please also clarify a few things for me. My appointment letter suggests Performance Commission, and in the Pay Slip, it's Ex Gratia. Which is correct, and can Performance Commission be included on the Pay Slip instead of the term Ex Gratia? In my view, both are incorrect to be added as part of your salary every month. Kindly suggest as soon as possible.
Thanks & Regards,
Ss
From India, Madras
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Thanks & Regards,
Ss
From India, Madras
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Yes, performance commission can be included in a payslip since it is based on your performance, which can be derived for a particular period, i.e., monthly, quarterly, yearly, etc. It is basically like a sales commission for sales personnel for achieving targets.
From India, Ahmadabad
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From India, Ahmadabad
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The word "ex-gratia" has not been defined in any labor enactment. As per the Oxford English Dictionary, ex gratia is a payment done from a sense of moral obligation rather than because of a legal requirement.
It is very clear, as per the pronouncement of various High Courts/Apex Court in their many judgments, that whether a particular item of payment is or is not a part of wages/salary must be decided independently of any contrary agreement between the parties. If the terms of appointment describe the payment of performance commission, it should be paid under the same head in the pay slip. The practice of an employer paying the same as ex gratia cannot be appreciated.
However, if any payment is made under the head ex gratia on a monthly basis, that would attract contributions towards PF/ESI. Any payment as ex gratia, at best, can be termed as an allowance and can be paid through the pay sheet for the purposes of CTC.
Regards,
Pkjain
From India, Delhi
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It is very clear, as per the pronouncement of various High Courts/Apex Court in their many judgments, that whether a particular item of payment is or is not a part of wages/salary must be decided independently of any contrary agreement between the parties. If the terms of appointment describe the payment of performance commission, it should be paid under the same head in the pay slip. The practice of an employer paying the same as ex gratia cannot be appreciated.
However, if any payment is made under the head ex gratia on a monthly basis, that would attract contributions towards PF/ESI. Any payment as ex gratia, at best, can be termed as an allowance and can be paid through the pay sheet for the purposes of CTC.
Regards,
Pkjain
From India, Delhi
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What is the difference between Performance Commission and Ex Gratia payment? In my appointment letter, the salary breakup suggests performance commission, while the Pay Slip shows Ex Gratia. Please advise if this discrepancy will pose any hindrance in the future.
Thanks & Regards,
Sri
From India, Madras
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Thanks & Regards,
Sri
From India, Madras
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Salary Break Up - Performance Pay.xls
SALARY CAN BE SPLIT INTO COMPONENTS BUT NOT LESS THAN THE MINIMUM WAGES.docx