Hi All,
I am Sonali.
I just gone through many sites to search for the exact formula for calculation of Gratuity, but still confused some are giving it like
[(Basic+da)/26]*15*no. of Yrs worked
some are giving it like
{[(Basic+da)*15]/26} * no. of Yrs worked
which one is correct n i also want to know the logic for this formula as well the basis +da is yearly or Monthly.
20th August 2010 From India, Mumbai

Member Opinions In This Discussion
Sumitk.saxena
Service/manager-hr
Sachinkashid
India, Pune
Hr Officer
SSrinath
Germany, Bühl
Abbasiti
India, Bangalore
Assistant Engineer, Indian Telephone Industries,
Smbhappy
India, Chandigarh
Finance, Hr, Sectarial Practices, Law And
Mallet
Senior Analyst - Talent Management
Suyoglabourconsultants
India, Kolhapur
Labour Laws
Benance
United Arab Emirates, Abu Dhabi
Human Resources Manager
Ppj134
Employee
India, Calcutta
Hr Manager
UIMIARUN
Very Strong In Ir,good In Trg
+4 Others

hi i think second one is correct and if you have any doubt refer to labour act Regards Dhruvin
Hello Sonali
First formula is correct.
Gratuity is calculated / paid for 15 days for every year of service completed.
So, first you need to divide the salary (basic & da) with total days of the month which gives you rate/day. then multiply it with 15 and no. of years completed.
Hope it is clear to you
regards
srinath
21st August 2010 From Germany, Bühl
hi sonali,
the formula is last drawn salary (basic+da) / 26 * 15 *year of service.
for any encashment e.g bonus calculation, leave encashment, deduction of epf, gratuity payment etc the component of basic salary +dearness allowance is consider rather than gross salary, 26 are the working days instead of 30 or 31 days, 15 is the figure for 15 days salary of each year and if year of service is 5 year or more than eligiblity for payment of the same will be possible. i think most of your doubt will be cleared now.
thanks & regards,
from,
sumit kumar saxena,
+91-9899669071, 0120-4131277
21st August 2010 From India, Ghaziabad
(Moneycontrol Wealth Calculator List Gratuity calculator) at http://wealth.moneycontrol.com/jtgratuity.php This link is helpful
22nd August 2010 From India, Hyderabad
The formula is basi +da divided by 26 multiplyed by 15 multiplied by no of yrs. completede . If some one crosses 6 months then it would be calculated for the next yr . Madras highcourt have given a verdict that gratuity shall be calculated in 4 yrs 8 months
22nd August 2010 From India, Calcutta
Dear, Both the formulas are correct and on application u will get same result... Regards, Sesar
22nd August 2010 From United Arab Emirates, Abu Dhabi
Dear sonali interpretation of sumitkumar saxena is perfect and as per the provisions of the payment of gratuity act, plz. Follow the same, kiran kale, kolhapur.
22nd August 2010 From India, Kolhapur
Dear
Basic & DA have to be taken as salary for gratuity calculation, if you take the gross salary it is more than the statutorily prescribed rate which will set as precedent.
the salary ie basic + da has to be divided by 26 to arrive one day salary which has to be multiplied by 15 then by no of years of service rendered. 5 yrs 6 months have to be taken as 6 years.
if any further clarification required, please do mail me.
C Manimaran

22nd August 2010 From India, Tiruchchirappalli
Dear Sonali,
I was also a same doubt in my mind few days back and also like u I went thru many sites and yes got confused....but after a discussion with a senior and yes experienced (more than 20yrs) HR professional he said that following formula is correct and also simple to calculate;
-[(Basic+da)/26]*15*no. of Yrs worked
I used it on trail basis and it is really gud and simple....now I am using it on regular basis......It is useful..
Regards,
Prashant

22nd August 2010 From India, Aurangabad
A platform for business and professional insights. Register at Cite.Co and grow professionally with your peers around the world.

Disclaimer: This network and the advice provided in good faith by our members only facilitates as a direction towards the actions necessary. 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.