Hi

Since the premium is paid to Insurance Company for Group Gratuity Scheme to all employees, most of the organisation in southern part of India, started including Gratutity as CTC In my opinion, you can consider only whoever completes four year of service in your organisation. The Gratuity Act does not applicable to any employees unless he completes 5 years of service. The additional benefit of Group Gratuity Insurance Scheme is after completion of five years of service, if an employee is deceased the life time gratutity benefit will be paid by Insurance Company and the burden will be on the organisation.

So consider these factors and include accordingly.

Dear Tania,

Most of the organisation are not considering the Gratuity amount in the CTC.  In my opinion, it should not be considered as a part of the CTC because of time period of 5 yrs. It is very difficult for an orgn to retain quality talent people in the orgn for 5 yrs.   

Tania, u can do one thing that you can conduct survey of gratuity in & around orgn. so that you can prepare a comparative summary of good companies for taking a decision.  It will be very easy for the management for taking decision. 

But I am confirming you that the most of the big corporates are not cosidering Gratuity as a part of CTC.  

Hope this will be helpful to you. 

Best regards,

Chitragya

Gratuity is part of CTC. It consist of 4.81% of Basic Pay. Gratuity is payable after completion of five years of continuous service. It is payable before Five years,also in event of premature death while in duty/job. Gratuity is not payable before completion of Five Years. No individual can claim gratuity before completion of 5 years of continuous service. Finance department make provision of Gratuity Payable every year for accounting purpose.

Premium is paid to any Agency like LIC/HDFC Life Insurance. It is kind of park money. And under strict supervsion of TRUST. It has differrent process. Most of organisation do not advocate park of huge amount.

Regards

V K Sharma,

Tarapur

Dear Sir/Madam,  .

Employer is not leagally bound to pay Gratuity apart from Gratuity payable under the Payment of Gratuity Act. In some organisation Gartuity is part of CTC. There is no standard for CTC.

Best Regards

VK Sharma

Tarapur