How does Group Gratuity insurance plans help your organisation?
Every employer, irrespective of nature of company, is obliged to pay his/her employees the gratuity that was promised when they decided to leave the company or retires. Gratuity is a pre-defined benefit and thus it is every employee’s right to be aware of his gratuity amount before joining so that he can take a learned decision. This gratuity is calculated by considering the employee’s previous salary and experience.
Gratuity insurance policies are mandatory but if the employer doesn’t have Group Gratuity policy, he might be able to meet the gratuity expenses of his employees leaving the company. In the absence of a group gratuity insurance policy, the employer has to let go of a huge amount from his company’s savings and let it impact the company.
Hence group gratuities are considered the best to save the company from any kind of financial burdens and this also allows the employer to deposit fixed amounts of money at any time of the financial year. This puts the employer in a position to meet the gratuity needs of a parting employee. There are multiple benefits to having group gratuity insurance policies to the employer. The most important is the tax benefit that this policy can give the company. Any amount of money that is deposited in the scheme by the organisation will be considered as a business expense and shall therefore be used by the employer to reduce his taxable income.