Understanding Gratuity Deduction in Salary for Employees Leaving Before 5 Years - CiteHR

No Tags Found!

Question: Gratuity in CTC and Employee Departure

We are showing gratuity in the CTC of employees. Let's suppose an employee leaves the company before 5 years. Do we need to pay them the gratuity amount in F&F, or are we not liable to pay them this amount before 5 years?

From India, Noida
Acknowledge(0)
Amend(0)

Hi, gratuity should not be deducted from the salaries of the employees. If gratuity forms part of the gross salary, then it is considered part of the employee's salary and should be paid back.

However, I presume your employer is making a premium payment to the insurance company for a group gratuity scheme, and the same is reflected in the CTC of the employee. In such cases, there is no need to pay the said amount to the employee before the completion of 5 years. However, if the employee completes 5 years of service, then you are liable to pay gratuity without fail.

From India, Madras
Acknowledge(1)
Amend(0)

Gratuity Can be part of the CTC but at the same time you need to ensure as how the terms & conditions mentioned against Gratuity. Based on the conditions mentioned can decide whether need pay or not.
From India, Bangalore
Acknowledge(1)
Amend(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.







Contact Us Privacy Policy Disclaimer Terms Of Service

All rights reserved @ 2025 CiteHR ®

All Copyright And Trademarks in Posts Held By Respective Owners.