Hi All, need to understand how Gratuity is mentioned in the CTC - like should it be part of CTC and deducted on monthly basis, or how is it done

Gratuity is a part of annual CTC as it is paid once in a year based on the IT Act or post 4 years some months as per the Gratuity Act.

@Isha: Gratuity cannot be part of the annual CTC. I had the same concern when I joined my startup organization. I consulted our legal consultant, who has over 25 years of experience in legal and payroll matters. They confirmed that some employers may include gratuity in the CTC offer letter, but this is not correct. Gratuity is a separate benefit that is paid to the employee when they meet the eligibility criteria. It is not a part of the salary and is not paid on a monthly basis.

It can be made part of ctc but is shown in deductions as for pf or Mediclame

Even in my past experience, the companies i have worked with, few companies had put it as part of CTC and few did not mention it as part of CTC, so just wanted to understand the best practice, thank you all for the inputs! this helps

Depending on the company's philosophy, CTC can be just salary, benefits, rewards, the company's investment in employees, or a combination of all. For example, if you work in sales in the BFSI, manufacturing, or FMCG industry, when the company is showing that indirectly that there is an amount they are eligible to receive if they continue to work for 4 more years. It is a motivator to stay in the company as they miss the amount receivable. This is a motivator for sales employees, and different companies may have different practices depending on the employee category, backgrounds, and diversity.