Cost to Company India Questions & Answers

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I refuse to accept that Gratuity can be part of CTC. The reasons are simple. If the amount shown in CTC is “actually accrued” to the concerned employee like PF contributions I can understand.

But it is open secret that unless 5 years continuous service is there, the concerned employee cannot get any Gratuity.

So till then, Gratuity should never be part of CTC till completeion of these 5 years. Even if the Employer is, for arguments sake actually parking the ACTUARIAL valuation amount due to the Employee in some Gratuity Linked Insurance Scheme each year, the fact is that unless and until that employee actually completes 5 years continuous service, he will NEVER be entitled to any Gratuity - neither from the LIC nor the Company.

So if the Employee in such a case resigns in say 3 years, whatever amount may have been deposited by the Organisation in his/her name, gets GROSSED up and ADJUSTED against New ly joined as well as older employees contributions as a WHOLE.

So there is no benefit that accrues to such an employee in reality and he never gets any penny from any such accumulation if he so resigns earlier than 5 years. So then how can Gratuity be part of his/her CTC until completion of 5 years continuous service ?

Your point is well taken but the fact is that you pick up any CTC letter and you will find ‘Gratuity’ amount in it.

Hi, I just wanted to know will other elements like Travelling Allowance, DA, Lodging, Car/Petrol Allowance etc. are to be considered for CTC (This is more related to marketing dept of a manufacturing company)

Yes. Anything and everything spent on an employee counts as part of CTC. CTC is nothing but the sum total of all expenses that a company makes on its employee.