Greetings Saunee,
Gratuity provisions are made by the employer and added as part of CTC as follows.
If the Wages were Rs.5000/-, the gratuity calculation will be Rs.5000 X 15/26 = Rs.2885/ annum this is added to the CTC per annum and this is approximately equivalent to 4.80% of the wages earned by the employee. Some companies have a Group Gratuity scheme with LIC of India and pay the Gratuity liability based on an actuarial valuation furnished by LIC. If an employee who is eligible to receive Gratuity leaves the company the company works out the liability and submits an application to LIC which in turn releases a cheque favouring the Group Gratuity fund of the company. The company releases the cheque to the employee thereafter.
Regards
M.V.Kannan
From India, Madras
257Gratuity provisions are made by the employer and added as part of CTC as follows.
If the Wages were Rs.5000/-, the gratuity calculation will be Rs.5000 X 15/26 = Rs.2885/ annum this is added to the CTC per annum and this is approximately equivalent to 4.80% of the wages earned by the employee. Some companies have a Group Gratuity scheme with LIC of India and pay the Gratuity liability based on an actuarial valuation furnished by LIC. If an employee who is eligible to receive Gratuity leaves the company the company works out the liability and submits an application to LIC which in turn releases a cheque favouring the Group Gratuity fund of the company. The company releases the cheque to the employee thereafter.
Regards
M.V.Kannan
From India, Madras
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