would u please assist me with reference to gratuity - that is paid after five years continued service to employees and it is calculated like this:
last availed salary*tenure period*15 days/26 days.
on other hand while taking the CTC we have Gratuity as 4.81% on Basic Salary.
now my confusion starts from here - when to take gratuity into account, after five years or on monthly basis. or whether this monthly calculation comes after 5 years?
please help me ,.......
Gratuity is paid as per the formular below.
Your SALARY (Basic salary + DA) last drawn
Gratuity is paid @ 15 days salary for each complete year of service.
15 days salary is calculated as SALARY/26*15
Gratuity paid is SALARY/26*15*years of service. (period of service > 6 months is rounded to 1 year) ie 6 years 7 months is 7 years
I hiope this is now clear
As gratuity is a liability of the company, for adding into the books of account, many companies are booking them on monthly basis at 4.81% of the basics.
But, however the employees are eligible to claim them on their completion of five years of services at the time of their separation.
If somebody left the services before the stipulated time of 5 years, the amount booked are reversed.
Hope it is clear..
Excellent HR Services,
4.81% of the basic plus dearness allowance is the gratuity liability of the employer every month. The quantum of gratuity is obtained by the following formula as provided under the Payment of Gratuity Act
(Basic + Dearness Allowance) /26 x 15 x Number of years of service. This is the liability at the end of service of the employee. The employer would like to assess his gratuity liability every month for so many different purposes and reasons. Therefore based on this formula the monthly gratuity liability to the employer per Rs.100 is calculated as follows:
Rs.100/26 x 15/12 = Rs4.807 if you calculate using a scientific calculator and if it is rounded off it becomes Rs,4.81 per hundred rupees. [Here the division by 12 is done to assess the monthly liability as 15 days wages is for one year(12 months) service].
If this amount is expressed as a percentage it is 4.81%.
Why Vote? User validation is extremely important for good content to prosper.