Dear Sir, Please give me advice about how can count the gratuity per month in CTC. B B Sharma
From India, Ahmedabad
From India, Ahmedabad
18
Yes Correct one is:- =Last Basic Salary*15/26*No. of Years add the amount with CTC Figure.
From India, Nagpur
From India, Nagpur
If you want to add gratuity cost in CTC, you need to include 4.8% of the salary. However, this will be incorrect to some extent since gratuity is based on the last drawn salary. If the person were to leave now (assuming 5 years completed), they would receive the gratuity based on the current salary, but the accumulated effect of the CTC of previous years would be lower.
Think along those lines, and you will have a more accurate model.
From India, Mumbai
Think along those lines, and you will have a more accurate model.
From India, Mumbai
Dear Brahmanand,
Gratuity is not a part of the Gross Salary of an employee. However, when sharing the CTC pattern, it is shown as 4.81% of the Basic Salary.
Below the CTC structure, please mention that "Gratuity as per Act." This will help solve all future issues. In case an employee has a very high basic salary and during retirement or separation, the actual calculation of gratuity exceeds 10 Lakhs, you can restrict the payment to 10 Lakhs. Otherwise, the employee may dispute with the management to have the actual calculation, which could be higher than 10 Lakhs. We have seen employees requesting ex-gratia amounts (the difference to 10 Lakhs) as it is part of CTC, although the act only supports up to 10 Lakhs.
HR Department BrainLight HR Solutions
From India, Mumbai
Gratuity is not a part of the Gross Salary of an employee. However, when sharing the CTC pattern, it is shown as 4.81% of the Basic Salary.
Below the CTC structure, please mention that "Gratuity as per Act." This will help solve all future issues. In case an employee has a very high basic salary and during retirement or separation, the actual calculation of gratuity exceeds 10 Lakhs, you can restrict the payment to 10 Lakhs. Otherwise, the employee may dispute with the management to have the actual calculation, which could be higher than 10 Lakhs. We have seen employees requesting ex-gratia amounts (the difference to 10 Lakhs) as it is part of CTC, although the act only supports up to 10 Lakhs.
HR Department BrainLight HR Solutions
From India, Mumbai
Hi Friends and seniors,
Greetings. Are we supposed to include the gratuity amount on a monthly basis in the salary/CTC structure? Does the gratuity act have any mention in this regard?
My second question is, what about the gratuity of workers/contract workers who work for more than 5 years with the company/agency but there is no mention of it in their CTC/salary structure?
From India, Vadodara
Greetings. Are we supposed to include the gratuity amount on a monthly basis in the salary/CTC structure? Does the gratuity act have any mention in this regard?
My second question is, what about the gratuity of workers/contract workers who work for more than 5 years with the company/agency but there is no mention of it in their CTC/salary structure?
From India, Vadodara
Dear Bijay,
In the Labour Law, CTC is not defined. For our own calculation, we have introduced the CTC concept many years ago. (It's not mandatory to show the Gratuity amount in CTC; normally, it is shown to represent the total/overall cost of the employee). Gratuity is applicable for contract workers as well, who have been working continuously with the same firm/contractor for more than 5 years.
HR Department BrainLight HR Solutions
From India, Mumbai
In the Labour Law, CTC is not defined. For our own calculation, we have introduced the CTC concept many years ago. (It's not mandatory to show the Gratuity amount in CTC; normally, it is shown to represent the total/overall cost of the employee). Gratuity is applicable for contract workers as well, who have been working continuously with the same firm/contractor for more than 5 years.
HR Department BrainLight HR Solutions
From India, Mumbai
Hi BrainLight,
Gratuity is applicable as per the act, yet it is not mandatory to show in CTC as it is for our calculation only. What should one do if they have to claim for the same if there is no mention of gratuity entitlement anywhere in documents? Can the issue be taken up just by proving that a person has worked for more than the period defined for the entitlement of gratuity? Does the Terms of Service call for its mention? Is it mandatory?
Thanks and regards, Bijay
From India, Vadodara
Gratuity is applicable as per the act, yet it is not mandatory to show in CTC as it is for our calculation only. What should one do if they have to claim for the same if there is no mention of gratuity entitlement anywhere in documents? Can the issue be taken up just by proving that a person has worked for more than the period defined for the entitlement of gratuity? Does the Terms of Service call for its mention? Is it mandatory?
Thanks and regards, Bijay
From India, Vadodara
Dear Saswata Banerjee,
I appreciate your response, but the 4.8% calculation applies to the basic salary only, not the total salary. The query pertains to including gratuity in the CTC, rather than for settlement purposes. Some companies choose to display gratuity and other direct or indirect expenses related to an employee in the CTC to provide a clear breakdown of manpower costs.
From India, Hyderabad
I appreciate your response, but the 4.8% calculation applies to the basic salary only, not the total salary. The query pertains to including gratuity in the CTC, rather than for settlement purposes. Some companies choose to display gratuity and other direct or indirect expenses related to an employee in the CTC to provide a clear breakdown of manpower costs.
From India, Hyderabad
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