The benefit of sticking with a job

What is the longest period you have served with a company? Two years? Three years? Have you ever stuck around for more than five years just to avail of gratuity? If you are employed in the private sector, this probably never crossed your mind. However, the government's decision to raise the tax-free gratuity limit from Rs 3.5 lakh to Rs 10 lakh for the private sector may prompt you to rethink your work strategy.

The decision puts the private sector employees at par with government employees, who got the raised limit in the Sixth Pay Commission. The gratuity amount is roughly calculated as half of the last monthly basic pay drawn, multiplied by the number of continuous years in service. So, now when you negotiate your salary, pitch for a higher basic salary as this will help you accumulate a good gratuity amount. Rather than just considering the 'cost to company' figure, you should also consider bargaining for a higher basic pay. However, skip this ploy if you never stick with a job for long as you stand to lose out on the money that is deducted from your salary under the gratuity head.