Hi, No Employer is not supposed to deduct any amount from your Gross salary towards Gratuity payment. Gratuity is a lump sum amount to be paid by the Employer to the employee as a form of appreciation for their long service and contribution to the company. Either Employer can pay the Gratuity amount directly at the time of separation or can avail the services Group Gratuity Scheme provided by various insurance Companies. In such scenario Employer can show the monthly premium incurred by them for the individuals in the CTC salary of the respective employees.
From India, Madras
942From India, Madras
Hi Yashodha
Your question is not clear.
You mean that company is deducting Gratuity portion in your gross wages or they are declaring as part of the CTC. If its declared part of CTC then no harm & can't be part of monthly gross wages
From India, Bangalore
Your question is not clear.
You mean that company is deducting Gratuity portion in your gross wages or they are declaring as part of the CTC. If its declared part of CTC then no harm & can't be part of monthly gross wages
From India, Bangalore
The concept of gratuity under the Payment of Gratuity Act,1972 is a one-time terminal benefit in lumpsum payable to an employee by his employer on his completion of five years of continuous service in the establishment. Therefore, it requires no deduction from the salary/wages of the employee concerned.
From India, Salem
From India, Salem
I presume that Gratuity was shown as part of your Cost To Company (CTC). This is done by employer to make provision for payment of Gratuity and to arrive at an actuarial valuation each year on the Gratuity liability.
Some employers contribute to Group Gratuity Scheme around 5% of your Basic salary and Dearness Allowance. This is a cash outflow done by the Company to manage their Gratuity Fund.
So as a practice Company shows this as part of CTC.
This does not mean that they are recovering Gratuity from your salary.
You will appreciate that employer also show Employer share of PF contribution as part of CTC. Here again, employer share of PF contribution is not deducted from your salary.
Some Companies show premium paid for you or your family, as the case may be, towards Mediclaim coverage. This is also shown as part of CTC. As aforesaid this cash outflow from the Company done for you is shown as part of CTC.
Trust the matter is clarified.
Regards
MVK
From India, Madras
Some employers contribute to Group Gratuity Scheme around 5% of your Basic salary and Dearness Allowance. This is a cash outflow done by the Company to manage their Gratuity Fund.
So as a practice Company shows this as part of CTC.
This does not mean that they are recovering Gratuity from your salary.
You will appreciate that employer also show Employer share of PF contribution as part of CTC. Here again, employer share of PF contribution is not deducted from your salary.
Some Companies show premium paid for you or your family, as the case may be, towards Mediclaim coverage. This is also shown as part of CTC. As aforesaid this cash outflow from the Company done for you is shown as part of CTC.
Trust the matter is clarified.
Regards
MVK
From India, Madras
If the employer follow CTC pattern then gratuity is part of CTC. And many employers follow a system of maintaining separate 'gratuity fund' under 'Actuary' in which case gratuity amount is remitted to the credit of that fund every year. Even here also no gratuity is is 'recovered' from the salary.
From India, Bangalore
From India, Bangalore
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