Gratuity calculation - salary structure.. CiteHR

kaykayhr Started The Discussion:

Dear all,
Our company doesn't have a salary structure yet. The salary is paid only on the head gross salary . In this case whether the gratuity is paid on the whole salary or shall we split some percentage of gross salary as Basic+ da for gratuity calculation and is it legal

Help me friends plzzzzz



sendilnathan -  Member Since: Sep 2007
Dear Anu, Apart from ESI all calculations should made only in Basic+DA (PF,Gratuity,Superannuation)so gratuity should be calculated only in basic+DA. Regards Sendil G

kannanmv -  Member Since: Apr 2009
Dear Anu,

As long as you do not have the salary structure broken up into Basic + DA (this must be greater than the minimum wages as per respective act) and other allowances it is implied that for all practical purposes the wage is the consolidated wage you are giving month on month. So Gratuity will be on the Gross salary only.


rintudhingani -  Member Since: Feb 2010
gratuity act

if your service is 5 years or above then you are libel gratuity composition

if your establishment is non seasonal then 1 year service salary + 15 days salary is your gratuity

ex. salary 10000 (10000/26=385 per day wages)
per one year your gratuty is 385*15 = 5775 rs.

kritz11 -  Member Since: Feb 2010
Will the employee be eligible for Gratuity even if he has not completed 5 years in the event of death? Will it be the same calculation


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