Hi all, I need your views/ comments on whether Gratuity can form a part of CTC at the stage of joining. Is it statutorily correct?
or Shall be applicable only after completion of the 5-year term. Awaiting your reply.
From India, Chicalim
2or Shall be applicable only after completion of the 5-year term. Awaiting your reply.
From India, Chicalim
Actually, the gratuity is not a part of CTC. It is applicable only after completion of continuous 5 years service.
However, some empployers are taking it as a part of CTC while bifurcating the salary structure, which is not at all a fair practice.
Regards,
Sivadasan
From India, Udaipur
However, some empployers are taking it as a part of CTC while bifurcating the salary structure, which is not at all a fair practice.
Regards,
Sivadasan
From India, Udaipur
As per my knowledge ;number of employers are considering it as a part of CTC...and it can be the part...
the deduction (generally 4.16% of basic) goes in a seperate account of gratutity ...
the eligibility for gratutity is 5 years working in the same organisation... and incase the employee lefts the organisation any day after 5years ...Employer has to pay the gratutity amount as per the calculation formula...
There is no mean of deductions after five years.... how the company will pay if employee leaves in 5.5 years
regards
manish
From India, Belgaum
the deduction (generally 4.16% of basic) goes in a seperate account of gratutity ...
the eligibility for gratutity is 5 years working in the same organisation... and incase the employee lefts the organisation any day after 5years ...Employer has to pay the gratutity amount as per the calculation formula...
There is no mean of deductions after five years.... how the company will pay if employee leaves in 5.5 years
regards
manish
From India, Belgaum
Normally as a part of CTC, it has been considered by most of the Organisation. The logical reason behind is " To allocate a sum of money in yearly basis (in employee account ) to a seperate trust/fund", which gets reflected in Annual balance sheet also. Eligibility of gratuity is after completion of 5 yrs only and considering the fact that the hired employee will stay with the organisation, for at least 5 years it is done. As such leagelly there is no clear clarification, whether the 4.81% of basic has to be covered as a part of Annual CTC.:icon1:
From India, Mumbai
From India, Mumbai
Dear Sachin,
Well, as far as i see this query.
try to get on safer side, do not include it in the salary break up.
Becoz, at times employee leave the org. before 5 years of services, then wat will u do.
r u going to force him first complete 5 years with us then only u r eligible for it.
I wish u should follow the law pertaining to this query.
u can add other benfits VRS, Superannuation etc.
Regards
Vipin
From India, New Delhi
Well, as far as i see this query.
try to get on safer side, do not include it in the salary break up.
Becoz, at times employee leave the org. before 5 years of services, then wat will u do.
r u going to force him first complete 5 years with us then only u r eligible for it.
I wish u should follow the law pertaining to this query.
u can add other benfits VRS, Superannuation etc.
Regards
Vipin
From India, New Delhi
Dear Sachin,
You hava posted a very good question for discussion. I would like to give my comments as under:
In my opinion if a service bond for five years is there then this amount can be very well shown as part of CTC.Althouh the risk of payment of gratuity starts from the completion of one year of service as in case of death gratuity has to be paid to the nominee of the employee. Notice pay, retrenchment compensation etc. are also these types of factors which cast liability on the employer which may or may not be included. The employer to be on safer side kept in account this type of liability in mind. If the responsibility of payment of gratuity has been given to the LIC etc.then the amount taken by LIC regularly should be shown in CTC.
Sumitted as requested,
R.N.Khola
Sr.Associate
From India, Delhi
You hava posted a very good question for discussion. I would like to give my comments as under:
In my opinion if a service bond for five years is there then this amount can be very well shown as part of CTC.Althouh the risk of payment of gratuity starts from the completion of one year of service as in case of death gratuity has to be paid to the nominee of the employee. Notice pay, retrenchment compensation etc. are also these types of factors which cast liability on the employer which may or may not be included. The employer to be on safer side kept in account this type of liability in mind. If the responsibility of payment of gratuity has been given to the LIC etc.then the amount taken by LIC regularly should be shown in CTC.
Sumitted as requested,
R.N.Khola
Sr.Associate
From India, Delhi
Hi ,
Thanks for your valuable suggestions... well would need a further clarification that..whether it is statutarily required to fill in the gratuity nomination form on joining or completion of 5 year term..and if so on joining, does that justify it to be included in CTC.
Please share your views.
Regards,
Sachin M.
From India, Chicalim
Thanks for your valuable suggestions... well would need a further clarification that..whether it is statutarily required to fill in the gratuity nomination form on joining or completion of 5 year term..and if so on joining, does that justify it to be included in CTC.
Please share your views.
Regards,
Sachin M.
From India, Chicalim
Dear Sachin M,
The nomination form in duplicate is to be filled on completion of one year of service that is too by the employe concerned as this form is to be submitted by the employee & after the verification of the particulars the copy of the same is to be returned to the employee by the management.
Regards,
R.N.Khola
Skylark Assocites, Gurgaon (Haryana)
From India, Delhi
The nomination form in duplicate is to be filled on completion of one year of service that is too by the employe concerned as this form is to be submitted by the employee & after the verification of the particulars the copy of the same is to be returned to the employee by the management.
Regards,
R.N.Khola
Skylark Assocites, Gurgaon (Haryana)
From India, Delhi
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FORM-F-NOMINATI ON OF GRATUITY.pdf
Gratuity Form I.doc
PF form 2 part A.jpg