I need to give the data of salary for actuary valuation of employees of my company. but i have one confusion that whether i need to give salary data of all the employees or only of the employees who have completed 5 years of services ??
please give your related suggestions and observations for the same..
04 November 2014
Though the gratuity liability payout arises after 5 years of service (except death),it starts accruing for the employer from day employee joins the company.
e.g Let us assume the 0 interest, 0 inflation 0 decrement (probability of death and exit is 0) world (hypothetical scenario). Then if the current yearly salary (basic + DA) is Rs 1200 then the accrued liability at the end of year 1 would be around 50 (around half month's salary for each year of service). You have to account this as a accrued liability in your books.