For Calculation Of Gratuity What Are The Components In The Salary Structures Used - CiteHR
Malikjs
Gm (hr)
Kaurasunil
Service
Pranavv
Asst General Manager-hr
Amit5chopra
Specialist
+5 Others

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Hi All,
I would like to know what are the categories or components in the salary structure that will be part of Gratuity Calculation. Let me elaborate my question -
Previous discussions in the Citehr.com mentions that for Gratuity calculation (Basic + DA) is taken in to account for the calculation. I want to know for companies mostly private companies that dont have DA in their salary structure what will be used for the calculation.

dear it is basic plus DA and as you have rightly asked ,most of the company does not pat DA tha it will be Basic only for calculation of Gratuity.
What if an employee fails to complete 5 years by few months. Meaning an employee works for 4 years 10 months in a company and had to resign. Can he request for Gratuity ?
It is true that most of Pvt company dosenot have the DA as pert of salary in that case we have to calculate the Graduity payable on basic only. Regards, Sunil Kaura.
My understanding is that While calculating gratuity, Basic Salary+ Spl. Alowance+ Dearness Allowance (which is Gross Salary) should be calculated. If DA is not provided by the establishment to its employee then basic DA should be calculated as per Shop & Commercial Establishment Act otherwise as per standing Government Order. Please someone help me on this to go forward.
Dear Sir
For calculating gratuity payable under the Payment of Gratuity Act all emoluments earned by the employee while on duty including dearness allowance but excluding bonus, commission house rent allowance overtime wages and other allowances has to be taken into account. If in case the Government had notified minimum wages to the employment in which the employee was employed,then the wages reckoned for calculating gratuity cannot be less than the minimum wages so notified by the Government. The wage rate payable to the employee will be the wage rate payable to him on his last working day with the employer.

Dear Sir / Madam,
What is the standard procedure of gratuity calculation. is it applicable special allowance in calculating of gratuity kindly confirm / inform me.
Thanking you,
With regards,
T Nagaraju

Gratuity is calculated as follows
Gratuity = Last basic + D.A/26*15* No of years served.
For Example Basic =3500
D.A=2000
No of years of service= 7 yrs
Then
Gratuity =(3500+2000)/26*15*7

Gratuity = 22211.54/-
PKS

Dear Sir: v.harikrishnan;1549217]
thank you for your guidance
i just had a small query:
we have considered gratuity as : Basic + DA
since we do not have DA as a part of salary
only conveyance (rs 800 ) and Educational allowance (rs 200)
we have calculated it only on the basis of Basic salary.
can you please guide if this is correct?
also the ex employee has sent a court summons to us.
can you please cite a court order where only basic was used since ther ewas no DA so i can present before court if required.
please guiide-
regards
pranav

Dear Mr.Pranav
For computing the gratuity payable the basic and dearness allowance paid to the employee has to be reckoned. Please read the definition of the term "wages" as defined in the Payment of Gratuity Act. According to this definition only basic and dearness allowance are to be reckoned for calculating the gratuity payable. Please show this definition to the Authority who has summoned you.
With regards
V.HARIKRISHNAN


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