If the personage was 62 and joined @70k he worked for 14 years and in appointment letter retirement or gratuity clauses are not there so do we need to pay him gratuity? Today his total salary is 180 k per month and the company wants him to work off role due to age.
From India, Kolkata
From India, Kolkata
Dear Colleague,
Based on the given information, such contracts are not appropriate and review such system. In the given situation, the employee is eligible for getting Gratuity as having completed 14 years of service. As far as Gratuity Act is concerned there is no level or designation which bars gratuity. Similarly irrespective of salary, employee is eligible for getting gratuity, as and when he completes 5 years of Continuous service.
However, need to pay only 15days of wages for every completed years of service as gratuity. The maximum gratuity that becomes non-Taxable is 20 Lakhs as of now. The employer may pay more gratuity over and above 20 Lakhs but it is taxable and subject to TDS.
Actually Gratuity is payable for Basic and DA only. If the payment is a consolidated pay, then the last drawn total consolidated pay to be taken into account.
Morally also when someone work for 14 years for a company, the employee shall not be deprived of his gratuity and it is a honour to be given to him/her.
From India, Chennai
309Based on the given information, such contracts are not appropriate and review such system. In the given situation, the employee is eligible for getting Gratuity as having completed 14 years of service. As far as Gratuity Act is concerned there is no level or designation which bars gratuity. Similarly irrespective of salary, employee is eligible for getting gratuity, as and when he completes 5 years of Continuous service.
However, need to pay only 15days of wages for every completed years of service as gratuity. The maximum gratuity that becomes non-Taxable is 20 Lakhs as of now. The employer may pay more gratuity over and above 20 Lakhs but it is taxable and subject to TDS.
Actually Gratuity is payable for Basic and DA only. If the payment is a consolidated pay, then the last drawn total consolidated pay to be taken into account.
Morally also when someone work for 14 years for a company, the employee shall not be deprived of his gratuity and it is a honour to be given to him/her.
From India, Chennai
For gratuity I have nothing to add to what Dr, Shivakumar said. His answer is prefect.
For Off-Role working, I assume you mean to appoint him as a consultant from now on?
If you do, you have to pay the gratuity till date and then let him resign. He can be reappointed as consultant but be careful in designing the appointment letter so that it does not end up being judged as a full term employee.
In case of consultancy agreement ensure you deduct TDS on the payment.
From India, Mumbai
For Off-Role working, I assume you mean to appoint him as a consultant from now on?
If you do, you have to pay the gratuity till date and then let him resign. He can be reappointed as consultant but be careful in designing the appointment letter so that it does not end up being judged as a full term employee.
In case of consultancy agreement ensure you deduct TDS on the payment.
From India, Mumbai
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