Regarding Gratuity

I have query here. When gratuity is part of CTC but not a part of Gross Salary. Why should we pay back. Within CTC we shall tell its employer benefit subject to statutory rules

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Thank you all for the clarifications. After going through all the responses, I understand Gratuity need to be paid only to eligible employees (those who complete 4 years and 240 days of continuous service) at the time of exit (resignation/retirement/transfer to other Geo) and not on a monthly basis.

As fellow members rightly pointed, CTC is the total cost incurred by the company against each employee. I have noticed few employers show annual employer PF component as part of CTC (just to give higher pay feel to employees) which doesn’t mean employer will have to pay the projected annual PF to an employee when they quit in the middle of the year.

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CTCeans it will bear by employees

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Dear Jaishree,

Just want to be clarified, on your second paragraph whereby employers add the PF component as part of CTC - should this not be the proper way? As clearly PF employer contribution is a cost to company?

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Yes, you are right. In my statement I meant to say likewise gratuity is also a cost to company.



I went through the post. Many valuable insights.

I have couple of questions:

  1. Is it legal to include Grauity in CTC?
  2. If we decide to include in CTC, what is the formula for that?
  3. Do our company have to be registered anywhere for Gratuity? or after completion of 4yrs 240 days, at the time of F&F , we just pay the gratutiy?
  4. Any other points to be considered?


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