Employee benefits
Is gratuity part of CTC?
Often, yes. Many employers include gratuity in CTC because it is a cost to the company. But it is not deducted from your monthly salary and it is not paid every month. You receive it as a lump sum when you leave after qualifying service, worked out by the law’s formula.
In short
- Gratuity is often shown in CTC as a cost to the company.
- It is not deducted from your monthly salary.
- You receive it as a lump sum when you leave after qualifying service.
- The amount follows the formula, not the CTC figure.
Why do companies show gratuity in CTC?
Because CTC is the total cost to the company of employing you, and gratuity is one of those costs. The employer sets money aside, or pays into a gratuity fund or group gratuity policy, as you build service.
Is gratuity deducted from my salary?
No. Gratuity is paid by the employer, not by you. If it appears in your CTC, it reduces your in-hand pay only in the sense that the company counts it in your package. Nothing is taken from your monthly pay for it.
Will I get the gratuity amount shown in my CTC?
Not necessarily. The CTC line is usually an estimate of the yearly cost. What you actually receive is worked out by the formula when you leave, using your wages at that time and your completed years. Our page on how to calculate gratuity shows how.
Frequently asked questions
Is gratuity included in CTC?
Often, because it is a cost to the company. It is not paid monthly.
Is gratuity deducted from salary?
No. The employer pays it, and nothing is deducted from your monthly salary.
Will I get gratuity if I leave before 5 years?
Normally not, unless you are a fixed-term employee with one year of service, or employment ends through death or disablement.
What happens when you talk to us
A 20-minute video call with a Growth Advisor. No obligation, and no quote pushed. It opens with a five-minute video from our founder on how the benefits stack works and why Ethika exists; the rest is your questions. You’ll leave with an honest read on your current cover and claims experience, and a straight answer on whether we can genuinely help, even if you never become a client.
20 minutes with a Growth Advisor. No obligation.
A note on this page. Everything here is general information, not legal or tax advice, and nothing is an offer. Gratuity rules are as understood at the review date under the Code on Social Security, 2020, in force from 21 November 2025, and state positions can differ. For advice about your situation, talk to us.