Is gratuity part of CTC?

How to tell whether your CTC includes gratuity

• Look for a line in the salary table called “Gratuity”, “Gratuity contribution” or “Gratuity provision”. It's sometimes grouped with employer PF under benefits or retirals.
• Check whether the total adds up. If the components only reach the stated CTC when the gratuity line is counted, it's inside the CTC.
• No line at all? The letter doesn't say, so ask HR. CTCtruth marks it as unknown rather than guessing either way.

How much the provision is

When gratuity is inside the CTC, the yearly amount is usually worked out from the Act's formula, 15 × monthly Basic ÷ 26 for each year of service. That's about 4.81% of annual Basic a year. For the same structure (Basic at 40% of the CTC) at a few CTC levels:

If the letter states a different gratuity figure, that figure is what counts, and it's worth asking how it was worked out.

What it does to your in-hand pay

A gratuity provision inside the CTC is money that isn't paid to you each month. For the same CTC, moving it outside would leave more for fixed pay:

At ₹12 LPA the difference is the whole provision spread over 12 months, ₹1,923, because there's no income tax at that level. At ₹30 LPA it's ₹3,308 rather than ₹4,808: that money would be taxed if it were paid as salary.

What you actually receive, and when

The provision in your CTC isn't what you're paid. Gratuity is paid when you leave, and it's worked out from your Basic and your years of service: 15 × monthly Basic ÷ 26 for each year. With a monthly Basic of ₹40,000, 5 years of service works out to ₹1,15,385.

If you leave before five years of continuous service, gratuity generally isn't payable under the Act, apart from its statutory exceptions. How your employer treats the provision it showed in your CTC is a matter of its own policy, so ask.

Questions to ask HR

• Is gratuity included in the quoted CTC?
• Is the gratuity figure in the salary table the Act's formula (15 × monthly Basic ÷ 26), or a different amount?
• How is the gratuity provision shown in the CTC treated if I leave before completing five years?

Check your own offer

Upload your offer letter and CTCtruth finds the gratuity line if there is one, checks it against the CTC, and shows your in-hand with it counted as what it is: a provision, not salary.

Check my offer letter

Source: Payment of Gratuity Act, 1972. Figures are worked out by CTCtruth's engine for FY 2026-27, working in Bengaluru, with Basic at 40% of the CTC and employer PF at 12% of Basic. See rules and sources.