Dear all,
I want to ask about gratuity. yesterday i see a article in which formula for gratuity was this (Monthly rate of wage last drawn * 15/26*Years of service). but before this i heared the formula for gratuity (last wages rate*15*years of service). First i want to ask what is the meaning of 26 is it days of month or anything else? Please brief i am in confusion.
Thanks & Regards,
Raj
From India, Gurgaon
5I want to ask about gratuity. yesterday i see a article in which formula for gratuity was this (Monthly rate of wage last drawn * 15/26*Years of service). but before this i heared the formula for gratuity (last wages rate*15*years of service). First i want to ask what is the meaning of 26 is it days of month or anything else? Please brief i am in confusion.
Thanks & Regards,
Raj
From India, Gurgaon
last monthly salary is rate of (basic+da)
26 means 26 actual working days in a month and not 30
15 implies half of this salary
no. of yrs means years completed (6 months or more to be counted as one year and less than 6 months to be omitted)
26 means 26 actual working days in a month and not 30
15 implies half of this salary
no. of yrs means years completed (6 months or more to be counted as one year and less than 6 months to be omitted)
Dear Raj,
The quantum of Gratuity is payable @ 15 days wages based on the rate of wages last drawn by the employee concerned for every completed year of service or part thereof in excess of six months. Here term wages means basic wage plus dearness allowance.
So gratuity will be (Basic+DA) /26*15* No. of completed years of Service.
We divided the last drawn monthly wages by 26 to get the per day rate of wages. 26 figure comes from total days in a month minus weekly off(s) of month. It is a standard figure taken for calculating daily wage of an employee. In Uttar Pradesh it is clearly described on the G.O. of Minimum Wage that to get daily wage we should divide the monthly rate by 26.
It is clearly given in Payment of Gratuity Act, 1972 (see Section 4(2) explanation) that in case of monthly rated employee, the fifteen day's wages shall be calculated by dividing the monthly rate of wages last drawn by him by twently six and multiplying the quotient by fifteen.
This explanation is only for monthly rated employee.
So it is standard figure that we follow to get daily rate of wage. I think it will clear your doubt.
Regards,
Anuj
From India, Lucknow
The quantum of Gratuity is payable @ 15 days wages based on the rate of wages last drawn by the employee concerned for every completed year of service or part thereof in excess of six months. Here term wages means basic wage plus dearness allowance.
So gratuity will be (Basic+DA) /26*15* No. of completed years of Service.
We divided the last drawn monthly wages by 26 to get the per day rate of wages. 26 figure comes from total days in a month minus weekly off(s) of month. It is a standard figure taken for calculating daily wage of an employee. In Uttar Pradesh it is clearly described on the G.O. of Minimum Wage that to get daily wage we should divide the monthly rate by 26.
It is clearly given in Payment of Gratuity Act, 1972 (see Section 4(2) explanation) that in case of monthly rated employee, the fifteen day's wages shall be calculated by dividing the monthly rate of wages last drawn by him by twently six and multiplying the quotient by fifteen.
This explanation is only for monthly rated employee.
So it is standard figure that we follow to get daily rate of wage. I think it will clear your doubt.
Regards,
Anuj
From India, Lucknow
Anuj,
The interpretation is right.
I have something to share with you. In most of IT companies, the gratuity funds are managed by LIC or some third party. These fund managers too follow 26 days working day contrast to 22 working days calender months of IT companies. They wish to stick to the 26 days as per Gratuity Act.
Best regards,
vishwanath
From India, Bangalore
The interpretation is right.
I have something to share with you. In most of IT companies, the gratuity funds are managed by LIC or some third party. These fund managers too follow 26 days working day contrast to 22 working days calender months of IT companies. They wish to stick to the 26 days as per Gratuity Act.
Best regards,
vishwanath
From India, Bangalore
Community Support and Knowledge-base on business, career and organisational prospects and issues - Register and Log In to CiteHR and post your query, download formats and be part of a fostered community of professionals.
FORM-F-NOMINATI ON OF GRATUITY.pdf
Gratuity Form I.doc