Difference between Provident Fund and Gratuity Fund
Provident fund and gratuity fund are both retirement benefits.
Difference between Gratuity Fund and provident fund has been explained below;
1. Gratuity Fund
Gratuity is the fund maintained by the employer and
only employer makes contribution in that fund. Employer is typically required
to make contribution equal to one Gross salary of all employees at the end of
each year. Gratuity paid on the termination of employment and calculated by multiplying
number of year served with Gross salary at time of termination of service.
2. Provident Fund
In Provident fund partial
contribution is made by the employee and equal contribution is made by
employer. For example in 10% provident fund both employees and employer is re make
contribution of 5% to provident fund. The employees are entitled to get that
contribution and interest earned on such contribution on termination of
service.
