Dear Seniors, Can anybody tell me how we get 4.81% of basic salary as the rate of deduction of gratuity ???? I want the mathematical calculation ....
From India, New Delhi
6From India, New Delhi
I just want to know how we get this formula - 4.81% of Basic for calculating the amount for gratuity deduction.....
From India, New Delhi
From India, New Delhi
The basis of 4.81% is
Let us take an employee's basic pay is Rs.100/-
Gratuity eligibility per year is latest basic / 26 * 15
Then the calculation is = 100 /26 * 15 = 57.69231
Then for one month = 57.69231 / 12 = 4.81 per month
Balaraman - TVS-Chennai
From India, Madras
Let us take an employee's basic pay is Rs.100/-
Gratuity eligibility per year is latest basic / 26 * 15
Then the calculation is = 100 /26 * 15 = 57.69231
Then for one month = 57.69231 / 12 = 4.81 per month
Balaraman - TVS-Chennai
From India, Madras
Dear HR Fraternity / Others,
In my viewpoint, the calculation of Gratuity in CTC of an employee is an eye-wash. I don’t know which HR fellow has introduced this in his company, where ?, when ?, why ?. All these years and many of the companies where these HR fellows are following this bad precedent.
If an employee only after completing his 5th year of continuance service in a company and get relieved on resignation or superannuation will be getting this amount as Gratuity. I am a HR fellow who hates this practice. I never introduced in my company where I worked so far. For the same HR fellows the same rule applicable – if he completes the full term of 5 years only, he is going to get this benefit.
There is no use for an employee who quit the company before completion of 5 years of service. Also another benefit called Superannuation scheme – its highly unreasonable one to be included in the CTC.
K. Gopalakrishnan
ASPI - Sriperumbudur
From India, Bangalore
In my viewpoint, the calculation of Gratuity in CTC of an employee is an eye-wash. I don’t know which HR fellow has introduced this in his company, where ?, when ?, why ?. All these years and many of the companies where these HR fellows are following this bad precedent.
If an employee only after completing his 5th year of continuance service in a company and get relieved on resignation or superannuation will be getting this amount as Gratuity. I am a HR fellow who hates this practice. I never introduced in my company where I worked so far. For the same HR fellows the same rule applicable – if he completes the full term of 5 years only, he is going to get this benefit.
There is no use for an employee who quit the company before completion of 5 years of service. Also another benefit called Superannuation scheme – its highly unreasonable one to be included in the CTC.
K. Gopalakrishnan
ASPI - Sriperumbudur
From India, Bangalore
Dear HR Fraternity / others,
One more thing - whether the Company includes this Gratutiy in your CTC or not - you have to be provided with the Gratuity automatically once an employee completes his 5 years of continuous service amicably and quits the company.
It is not a monthly / annual coolie........... it is a benefit which a company offers to its employee - for good conduct and work for continous five years which he rendered for the company.
So inlcuding 4.81% in monthly CTC and annual CTC is ..................... something fishy.
if anyone get his offer letter - please do not hesitate to ask the Top HR fellow - what will be your take home pay (THP), thats more important............... even some fellows will include the Group Medical Insurance Policy amount which a company pays annually to the insurance company - in your CTC. Plesae be careful........ juniors............
K. Gopalakrishnan
Sriperumbudur
From India, Bangalore
One more thing - whether the Company includes this Gratutiy in your CTC or not - you have to be provided with the Gratuity automatically once an employee completes his 5 years of continuous service amicably and quits the company.
It is not a monthly / annual coolie........... it is a benefit which a company offers to its employee - for good conduct and work for continous five years which he rendered for the company.
So inlcuding 4.81% in monthly CTC and annual CTC is ..................... something fishy.
if anyone get his offer letter - please do not hesitate to ask the Top HR fellow - what will be your take home pay (THP), thats more important............... even some fellows will include the Group Medical Insurance Policy amount which a company pays annually to the insurance company - in your CTC. Plesae be careful........ juniors............
K. Gopalakrishnan
Sriperumbudur
From India, Bangalore
Dear Gopalakrishnan,
It has to be included in CTC. CTC represents cost to the company and gratuity coverage starts from the date of joining. Company has to contribute annuity amount every year for all employees whether he is 5 years more or less. As per Gratuity act if anything happens to employee's life immediately after drawing one month salary, the surviving family members will get full gratuity amount.
Bala, Chennai.
From India, Madras
It has to be included in CTC. CTC represents cost to the company and gratuity coverage starts from the date of joining. Company has to contribute annuity amount every year for all employees whether he is 5 years more or less. As per Gratuity act if anything happens to employee's life immediately after drawing one month salary, the surviving family members will get full gratuity amount.
Bala, Chennai.
From India, Madras
Dear Sir,
I want to know that few days back i have attended interview...in my interview following qestion was raised so please clear my ....qestion.
1. If company employee has injured for out side, what will comany will dermenate as soon....
2. If employee is not covered in ESI, what will company will give full salay...
So you are request to please do the needful.
Regards,
MoolChand
From India, Delhi
I want to know that few days back i have attended interview...in my interview following qestion was raised so please clear my ....qestion.
1. If company employee has injured for out side, what will comany will dermenate as soon....
2. If employee is not covered in ESI, what will company will give full salay...
So you are request to please do the needful.
Regards,
MoolChand
From India, Delhi
Dear Friends,
First and foremost, there cannot be any deduction of any %age against Gratuity from an employee's salary. It is illegal and most unfair.
I am of the opinion that including Gratuity in the CTC of an employee is not fair. After all an employee becomes eligible for Gratuity ONLY after completion of 5 years' continuous employment with the Company. If the employee decides to leave the Co. or is asked to leave before 5 years' he/she will be deprived of this benefit.
CTC fixation calls for salary negotiations and most times the employee's current remuneration package becomes the basis for deciding the new CTC.
At times some smart candidates also include leave encashment in their current CTC with the intention of getting a better package. How do we address such a situation??
Best Wishes,
Vasant Nair
From India, Mumbai
First and foremost, there cannot be any deduction of any %age against Gratuity from an employee's salary. It is illegal and most unfair.
I am of the opinion that including Gratuity in the CTC of an employee is not fair. After all an employee becomes eligible for Gratuity ONLY after completion of 5 years' continuous employment with the Company. If the employee decides to leave the Co. or is asked to leave before 5 years' he/she will be deprived of this benefit.
CTC fixation calls for salary negotiations and most times the employee's current remuneration package becomes the basis for deciding the new CTC.
At times some smart candidates also include leave encashment in their current CTC with the intention of getting a better package. How do we address such a situation??
Best Wishes,
Vasant Nair
From India, Mumbai
Calculation of gratuity % is not as simple as is illustrated in these discussions. If the employers are showing gratuity at 4.81% and including in the CTC, they are in a way misguiding the candidate. This % is valid any if the person leaves the company after 5 years. If a person leaves before this period, he is not entitled to. To arrive at gratuity % is a separate science itself. This is similar to how life insurance premiums are fixed. The factors which influence the gratuity contribution by the company towards its employees are:
Salary of all the employees
Date of birth of each employee
Retirement age of employees
No of years the employee has put in in the company.
These data are asked every year by the organization which manages the company's gratuity fund (in most cases it is the LIC). On furnishing these data the organization calcuates how much fund the company should deposit in this account. In my experience of over 30 years, the % has not crossed 0.5% of total basic and DA. Please understand there is also a cap on the gratuity payable to a person when he quits the company and hence such a low %.
Hope I am clear
With best wishes
V.T.Avadhany
From India, Bangalore
Salary of all the employees
Date of birth of each employee
Retirement age of employees
No of years the employee has put in in the company.
These data are asked every year by the organization which manages the company's gratuity fund (in most cases it is the LIC). On furnishing these data the organization calcuates how much fund the company should deposit in this account. In my experience of over 30 years, the % has not crossed 0.5% of total basic and DA. Please understand there is also a cap on the gratuity payable to a person when he quits the company and hence such a low %.
Hope I am clear
With best wishes
V.T.Avadhany
From India, Bangalore
Dear Mr Gopalakrishnan :
In our Group of companies which I am heading the HR functions, though we have the Gratuity in the CTC, in case of employees leaving the services of the company prior to 5 yrs services, the amount being considered for gratuity in the CTC is being paid back to the employees in his final settlement.
Also, perhaps, you may think of having the Gratutiy policy with the Insurance companies, which I am sure u may be aware of.
Rgds
Dhinakaran
From India, Hyderabad
In our Group of companies which I am heading the HR functions, though we have the Gratuity in the CTC, in case of employees leaving the services of the company prior to 5 yrs services, the amount being considered for gratuity in the CTC is being paid back to the employees in his final settlement.
Also, perhaps, you may think of having the Gratutiy policy with the Insurance companies, which I am sure u may be aware of.
Rgds
Dhinakaran
From India, Hyderabad
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