Dear Team, Looking for Suggestions. If the gratuity amount has been deducted from the employee's CTC break-up, is he liable to pay interest on the gratuity amount whenever he wants to withdraw, resign, or retire from the company? If he is liable to pay interest on the gratuity amount, what is the rate of interest and calculation?
From India, Hyderabad
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2From India, Hyderabad
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No amount is deducted from the salary of any employee by any employer. If the employer has shown the amount payable by way of gratuity in the CTC statement, it is a wrong interpretation by the employee and not a fault of the employer. Can you find gratuity as a deduction on your payslips? No, you cannot find it.
Gratuity Payment Conditions
Gratuity becomes payable only when the employee leaves the company, and that too after 5 years of service. In the case of death, however, this 5-year service requirement does not apply. The amount is payable within 30 days of leaving. If you fail to pay within 30 days, then the employer is legally bound to pay interest as fixed by the appropriate government.
From India, Kannur
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Gratuity Payment Conditions
Gratuity becomes payable only when the employee leaves the company, and that too after 5 years of service. In the case of death, however, this 5-year service requirement does not apply. The amount is payable within 30 days of leaving. If you fail to pay within 30 days, then the employer is legally bound to pay interest as fixed by the appropriate government.
From India, Kannur
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I think this misconception is prevalent among many HR youngsters. First of all, they should understand what is meant by CTC and when the description of components is applicable.
Understanding CTC
CTC is only an indicative term that shows the cost of an employee to the organization and does not mean all the components are to be paid immediately or that the employee is entitled to them without fulfilling the prescribed conditions. The CTC concept is meant to provide an idea for both the employee and the employer. For example, Gratuity, EPF Employer contribution, and other benefits will be included in CTC, but will they be shown anywhere on the employee's pay slips? Similarly, variable benefits, LTA, ESI, etc.
From India, Hyderabad
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Understanding CTC
CTC is only an indicative term that shows the cost of an employee to the organization and does not mean all the components are to be paid immediately or that the employee is entitled to them without fulfilling the prescribed conditions. The CTC concept is meant to provide an idea for both the employee and the employer. For example, Gratuity, EPF Employer contribution, and other benefits will be included in CTC, but will they be shown anywhere on the employee's pay slips? Similarly, variable benefits, LTA, ESI, etc.
From India, Hyderabad
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Gratuity-Leave calculation on CTC-Rev..xls
Gratuity calculation.doc