Dear Seniors, We have made gratuity is the part of CTC & it is mentioned in our offer letter so is it mandatory to pay if employee is leaving before 5 years?
From India, New Delhi
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From India, New Delhi
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Hi.... If employee is not completed 5 years or 4 year 7 month, he is not eligible for gratuity, therefore no need to pay ...
From India, Bengaluru
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1From India, Bengaluru
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Dear Sir, Asper The payment of gratuity act 1972, there is no need to pay gratuity to him because he is not completed 5 years of service. Thanks,
From India, undefined
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From India, undefined
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Dear Sir , We have shown gratuity is the part of his CTC its mention on his offer letter & we re deducting some amount every month .
From India, New Delhi
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From India, New Delhi
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Dear Sir,
Your query is not clear. As per the Gratuity Act, you need not pay gratuity to him because he is not eligible. However, you had mentioned the amount in the offer letter/appointment letter as part of CTC. Therefore, you are liable to pay gratuity as per the contract. He can't claim gratuity under the Gratuity Act, but he can claim as per the contract.
Thanks,
From India, undefined
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Your query is not clear. As per the Gratuity Act, you need not pay gratuity to him because he is not eligible. However, you had mentioned the amount in the offer letter/appointment letter as part of CTC. Therefore, you are liable to pay gratuity as per the contract. He can't claim gratuity under the Gratuity Act, but he can claim as per the contract.
Thanks,
From India, undefined
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Dear Friends,
CTC means Cost to Company, hence all the costs which the company/organization/establishment is spending on the premium should be considered into the CTC. If an employee does not complete the basic requirement of eligibility of 5 years of service (4 years and 240 days), then he/she is not eligible to receive anything under gratuity, even if it is mentioned in the CTC annexure attached with the Appointment order.
Nandkishor
From India, Pune
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CTC means Cost to Company, hence all the costs which the company/organization/establishment is spending on the premium should be considered into the CTC. If an employee does not complete the basic requirement of eligibility of 5 years of service (4 years and 240 days), then he/she is not eligible to receive anything under gratuity, even if it is mentioned in the CTC annexure attached with the Appointment order.
Nandkishor
From India, Pune
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The term CTC is more confusing than clarifying. CTC is only the computed cost indicating the per head expenses of the organization for its manpower. It includes not only the direct benefits that the employee receives every month but also the proportionate cost for indirect employee benefits such as transport, canteen, medical, township, social clubs, associations, etc. The employee doesn't receive these indirect benefits in hand, like the employer's share of PF or the annuity paid for gratuity, but they are accounted for.
The eligibility for gratuity is only after completion of the required length of service, and it is not paid before, as mentioned above. However, it is still an expense borne by the company and is factored into the calculation of CTC. Therefore, CTC is only an indicative figure, and what the employee actually receives as gross pay may differ.
From India, Mumbai
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The eligibility for gratuity is only after completion of the required length of service, and it is not paid before, as mentioned above. However, it is still an expense borne by the company and is factored into the calculation of CTC. Therefore, CTC is only an indicative figure, and what the employee actually receives as gross pay may differ.
From India, Mumbai
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First of all, let's understand the meaning of CTC - Cost to Company, which refers to the yearly expenditure that a company spends on an employee. The amount each employee spends depends on their salary and the variable package offered for the job.
Regarding Gratuity, it is a variable payout usually given after a certain period of service completion. If the required period is not fulfilled, no payment is made. It's important to note that this variable payout is not a specific percentage of an employee's Gross Salary but rather a fund created by the employer, either through establishment funds or an insurance policy.
The definition of Gratuity specifies it as a financial component provided by an employer to an employee in recognition of their service to an organization. This payment is made upon superannuation, retirement, resignation, or in the event of death after completing 5 years of service.
Thanks & Regards,
Sumit Kumar Saxena
From India, Ghaziabad
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Regarding Gratuity, it is a variable payout usually given after a certain period of service completion. If the required period is not fulfilled, no payment is made. It's important to note that this variable payout is not a specific percentage of an employee's Gross Salary but rather a fund created by the employer, either through establishment funds or an insurance policy.
The definition of Gratuity specifies it as a financial component provided by an employer to an employee in recognition of their service to an organization. This payment is made upon superannuation, retirement, resignation, or in the event of death after completing 5 years of service.
Thanks & Regards,
Sumit Kumar Saxena
From India, Ghaziabad
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Dear colleague,
It is to be clearly understood that reckoning Gratuity cost as a part of CTC is well justified. The companies are required to make financial provisions either by creating a fund for it or linking with an insurance company.
The justification and liability arise from the fact that it becomes payable to the employee's heir or nominees in case of his/her death after joining, irrespective of the length of service.
However, in case any employee gets separated before completing five years of eligible service, he is not eligible for it, notwithstanding gratuity being considered as a part of CTC.
Regards,
Vinayak Nagarkar HR and Employee Relations Consultant
From India, Mumbai
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It is to be clearly understood that reckoning Gratuity cost as a part of CTC is well justified. The companies are required to make financial provisions either by creating a fund for it or linking with an insurance company.
The justification and liability arise from the fact that it becomes payable to the employee's heir or nominees in case of his/her death after joining, irrespective of the length of service.
However, in case any employee gets separated before completing five years of eligible service, he is not eligible for it, notwithstanding gratuity being considered as a part of CTC.
Regards,
Vinayak Nagarkar HR and Employee Relations Consultant
From India, Mumbai
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SBT Vs Asst. Labour Commissioner- Gratuity dismissed employee-LTS.PD F
FORM I(Application for Gratuity by an employee).doc