Dear All,

I came to known there are two acts regarding Gratuity 1971 and 1972; which act can I follow for my employees?

one of employees who completed 5.2 years and submitted resignation, how can I pay gratuity?

Some one says that Last month drawn gross salary is equivalent to gratuity? is it correct? (or) any other formula?

Regards,

Kranthi Kumar.B

9399931460

the Gratuity Act for India is 1972 only and the last month drawn salary is not equal to the gratuity amount if the Employee is having more than 5 years of experience in the same organization continuously then he is eligible to get the gratuity amount and gratuity formula is

Calculation of Gratuity

Gratuity is calculated at 15 days wages last drawn by the employee for each completed

year of service. The monthly wage is divided by 26 and multiplied by 15. In computing a

completed year of service the period in excess of six months shall be taken as a full year.

Gratuity = Monthly salary x 15 days x No. of years of service

26

Maximum amount of Gratuity payable

The maximum amount of gratuity payable under the Act is Rs. 3,50,000.00.

Forfeiture of Gratuity

**Good Morning !!!**

Please find the below mentioned Gratuity formula, employee has completed 5year 7month of service the period so will be taken 6year.

Gratuity = Basic pay*15/26*Year

Thanks & Regards,

Umamaheswaran D

Executive-HR

Dear All, I came to known there are two acts regarding Gratuity 1971 and 1972; which act can I follow for my employees? one of employees who completed 5.2 years and submitted resignation, how can I pay gratuity? Some one says that Last month drawn gross salary is equivalent to gratuity? is it correct? (or) any other formula? Regards, Kranthi Kumar.B 9399931460 |

Last drawn basic+DA+Special Allowance, if any(in special allowance only the portion of which is heading to PF) is considered. The total of these components is multiplied by 15 and devided by 26. The sum arrived at is multiplied by the total number of years of continuous service.The remainder of the service is in excess of 6 months then it is considered to be a full year for calculation of Gratuity.

regards

madhwa

your formula is right.

but, eligibility for gratuity is continuous service is 5 years. means 4 years 240 days. one year completed means, the employee should work in that organisation 240 days.

thanks

Basic + DA + IR(interim relief) if any X 15 X No. of yrs of service

-------------------------------------------------------------

26

Please note the person should have been completed 5 years in service. 5 yrs plus 6 month should be considered as 6 yrs for the calculation.

If covered unde Journalist Acts the period should be 10 years.

Hope this will suffix your requirement.

Please note for calculation of Retrenchment the same formula is used by the difference is Gross salary is taken into consideration against Basic + DA + IR.

As u said in ur posting that 3 components are considered for gratuity calculation viz. Basic+D.A.+Special allowance. Can u give me any documentary evidence(notification or court judgement) of special allowance to be considered for grauity. During my final settlement with my previous employer s.a was not considered for gratuity. This will help me claim my demand with my previous employer.

reds

yogi

09377708949

.

**POSTING RULES OF CONDUCT**

Why Vote? User validation is extremely important for good content to prosper.

__The advice should be validated by proper consultation with a certified professional.__The network or the members providing advice cannot be held liable for any consequences, under any circumstances.