As stated by Mr.Shyam Agarwal, Gratuity cannot be deducted from employee's salary, that's against law. Gratuity has to be paid to an employee who has completed 5 full years at the time of his exit from the organisation. In excess of 5 yrs the balance period if it's less than 6 months it should be ignored and if it's above six months it should be treated as 1 year. For Eg : X employee leaves the company 5.4 years means he is eligible for only 5 years. If he is leaving 5.7 years he is eligible to get gratuity for 6 years.
Any more inputs are welcome.
M.Karthik
HR
From India, Madras
4Any more inputs are welcome.
M.Karthik
HR
From India, Madras
Suppose the same employee after three years any break is he eligible to get gratuity.
contract employees eligible for gratuity if continual service for five years? In general how much break we may give for contract employees?
From India, Secunderabad
Dear All, I too have a same doubt in this. In CTC part Gratuity will be deduction by most of companies.. Is there any criteria to deduct in CTC Regards, Munaf
From India, Madras
From India, Madras
May i have the copy of the judgement of supreme court regarding gratuity (i.e.No Employer has no right to deduct the Gratuity amount from the salary of the employee. As It has to be paid from the employers pocket after his retirement, superannuation or death. If any employer has deducted that he is liable to give back the entire deducted amount with 12% interest as per the latest supreme court judgment)
From India
From India
Thanks for your reply... As i mentioned in my post, it was added to my CTC in the latest appraisal form, Hence, while calculating my appraisal percentage, this is also getting added... which i would never get unless i serve here for another 3.5 years... So is this the right way what the company is doing?
From India, Madras
From India, Madras
Dear Arun, That is what I was saying that your company is not doing it right. Your company has no right to do it. Your company cannot add and deduct the gratuity form the CTC.
From India, Kochi
From India, Kochi
Dear all,
according to my knowledge the gratuity should not be deducted from the employee salary means here gross salary. There is much difference between gross salary and CTC. But what ever the employer's contribution that is in addition to the gross salary. Hence the company having right to shows it as CTC not in Gross salary.Here the companies are not doing wrong thing at all.
Regards
Raju
From India, Secunderabad
according to my knowledge the gratuity should not be deducted from the employee salary means here gross salary. There is much difference between gross salary and CTC. But what ever the employer's contribution that is in addition to the gross salary. Hence the company having right to shows it as CTC not in Gross salary.Here the companies are not doing wrong thing at all.
Regards
Raju
From India, Secunderabad
Dear friends,
I have one more point to add to this discussion. If the employers are showing
gratuity component in CTC (cost to company) for cost accounting purpose, it is to be paid at the end of one's service after completion of five years (exception - death) at the rate of last pay then prevailing. In the CTC, it is perhaps being shown at current rate of pay. Then how they would match the difference between one's salary now and after ten or fifteen years ? As pointed out in the discussions above, some companies are merely showing the gratuity component in CTC for cost accounting purpose, some are perhaps ignorantly recovering it from the employees' monthly salary. This needs to be examined carefully and some workable solution arrived at satisfying larger community.
From India, Pune
I have one more point to add to this discussion. If the employers are showing
gratuity component in CTC (cost to company) for cost accounting purpose, it is to be paid at the end of one's service after completion of five years (exception - death) at the rate of last pay then prevailing. In the CTC, it is perhaps being shown at current rate of pay. Then how they would match the difference between one's salary now and after ten or fifteen years ? As pointed out in the discussions above, some companies are merely showing the gratuity component in CTC for cost accounting purpose, some are perhaps ignorantly recovering it from the employees' monthly salary. This needs to be examined carefully and some workable solution arrived at satisfying larger community.
From India, Pune
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FORM-F-NOMINATI ON OF GRATUITY.pdf
Gratuity Form I.doc