Gratuity in Salary: Gratuity facility is provided to salaried persons by the company, but do you know that gratuity money is deducted from your salary every month. Today we will tell you how much amount of gratuity is deducted from your salary and when does the employee get the benefit of gratuity. Let us know in detail in this article.
Whenever we join a new company, we read the offer letter very carefully. In the offer letter, the company gives information about CTC, Home Rent Allowance (HRA), Basic Salary and many other facilities.
Among these facilities, there is another facility which many people do not pay attention to.
We are talking about gratuity. Gratuity is also a kind of allowance. Please note that the amount of gratuity is deducted from your salary. This information is given by the company along with the offer letter.
You will get information about the amount of gratuity deducted from your salary in the offer letter. Let us know the answers to these questions in this article.
What is the amount of gratuity?
The company tells in the offer letter itself what is the share of gratuity in CTC (Cost To Company). Whenever an employee gets salary, the amount of gratuity is already deducted from it. Actually, many companies give 4.81 percent of basic salary as gratuity.
The government has also made a Gratuity Act for the employees. According to the Gratuity Act 1972, 4.81 percent of the basic salary is deducted every month for gratuity.
For example, if a person’s annual income is Rs 5 lakh, the share of gratuity will be 4.81 percent. That means Rs 24,050 will be deposited in the gratuity fund annually. This means that the company deducts Rs 2,000 from the person’s salary every month as gratuity.
Although it is the responsibility of the company to pay gratuity, the company deducts this amount from the employee’s salary.
When is the gratuity amount received?
According to the Gratuity Act 1972, the company is required to keep gratuity provision for its employees. For this reason, the amount of gratuity is deducted from the employee’s salary every month.
When an employee works in the same company for 5 consecutive years then he gets the benefit of gratuity. If he leaves the job or changes the company before 5 years, he will not get the benefit of gratuity.
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