Hi All, can employer deduct gratuity from employee's per month salary? If yes, than what happens if that employee leaves company before completing 5 years?
I know that gratuity is a part of CTC, but what if company has not mentioned any gratuity amount in CTC breakup and still deducting gratuity?
From India, Mumbai
I know that gratuity is a part of CTC, but what if company has not mentioned any gratuity amount in CTC breakup and still deducting gratuity?
From India, Mumbai
Hi,
Yes, an employer can deduct X amount towards Gratuity, as mentioned in the CTC breakup. In this case if an employee leaves the organization within 5 years, payment of Gratuity lies in sole discretion of the employer. It is not mandatory that the employer has to pay the amount deducted towards Gratuity from the employee since his joining month.
However if the employer deducts X amount towards Gratuity which is not mentioned in the CTC breakup, then the employer has to pay the amount deducted, if the employee leaves the organization before completion of 5 years, technically 4.8 years.
From India, Bangalore
477Yes, an employer can deduct X amount towards Gratuity, as mentioned in the CTC breakup. In this case if an employee leaves the organization within 5 years, payment of Gratuity lies in sole discretion of the employer. It is not mandatory that the employer has to pay the amount deducted towards Gratuity from the employee since his joining month.
However if the employer deducts X amount towards Gratuity which is not mentioned in the CTC breakup, then the employer has to pay the amount deducted, if the employee leaves the organization before completion of 5 years, technically 4.8 years.
From India, Bangalore
CTC is the amount that the company invests for the employee's benefits. Gratuity is one of them. Also the Mediclaim policy is also a part of the CTC, but the coverage ends the moment the employee has been relieved from the organisation. Like wise the Gratuity is payable only and only when the person completes 5 complete working years. So even if it is a part of the CTC, does not mean it needs to be paid prorata, the Gratuity is governed by the Gratuity Act and therefore payment before that is not possible.
Kindly note that these are Employer cost and not employee costs, so these are governed by the specified acts for the same.
Regards,
Ashutosh Thakre
From India, Mumbai
Kindly note that these are Employer cost and not employee costs, so these are governed by the specified acts for the same.
Regards,
Ashutosh Thakre
From India, Mumbai
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REQUEST FOR DEDUCTION OF GRATUITY AMOUNT (2).pdf
PMRPY-DEDUCTION -SOLUTION.xls