Do you have gratuity as part of your CTC ?
If yes, are you okay with it being part of CTC ?
I mean, if gratuity is part of CTC and you leave the company before 5yrs, technically, shouldn't it be credited to you because it's not something extra outside of your CTC structure (heck it also can be seen as ESOPs, as gratuity and ESOPs are mostly used for employee retention) ?
Talking product sense with Ridhi
9 min AI interview5 questions
Gratuity shouldn't be part of CTC. If they are showing it part of CTC and deducting it monthly then you've been tricked by the company. Make sure to negotiate all this while joining the company.
I actually joined a few months ago. I did not know gratuity was not supposed to be part of CTC. I was recently talking with my friend when we were filing ITR and he asked me to show my CTC as I asked him what tax benefits I can make use of. That's when he told me about gratuity and why it shouldn't be part of CTC.
Is it too late to talk with finance team and get this sorted ?
There is no talking that can make them remove gratuity from CTC, since it is standardised structure across the organisation. All that can be insisted upon, is that one can ask the expected Fixed to he increased by the Gratuity amount, if one notices Gratuity being part of CTC.
Yes it is an unfair practice. But most service based companies keep Gratuity part of CTC. Even some product based companies do so. Worse is, some companies show even annual insurance premium amount (approx 10k-20k) to be part of CTC.
But, there are many organisations (mostly product based), which don’t show up Gratuity in CTC. I have heard that some organisations even don’t show employer’s part of PF in the pay structure/offer letter (they may skip the term ctc though).
Wait, insurance premium should also not be part of CTC ? 👀💀.
That means 1.5L of my CTC is just to make it look big ?
If you know what CTC means, you would not have this doubt, even though u wont get paid the money if you leave before 5 years, its the cost company will be keeping it aside in ur name.
CTC is cost to the company and gratuity is a cost for them. They may argue that if you stay for 5 years then you get it, so they are not asking you to leave before it
But like I said, it's a retention strategy. Like ESOPs. So, irrespective of when you end up leaving the company, I should have that benefit in my hand, right ?
So, if my CTC is 10L and gratuity is 1L, then technically my CTC is 9 because I'm not getting than 1L.
Gratuity is actually better and more predictable than ESOP, IMO. In ESOP nobody knows if company will IPO or stock price will go up and you need capital to buy the shares. I was once offered shares and the company never listed.
They probably included the tea coffe and the toilet paper I will use if I shit in the office. Thats the only way I can explain why my CTC is so high and my in hand salary is so low.
Same same.