Good morning seniors, One of my employees joined the organization on 01-04-2002 and resigned on 17-11-2014. What will be the calculation of his gratuity? Besides, we have insured the gratuity with LIC of India. Secondly, kindly clarify how to consider the completion of the year, either on the calendar year or the financial year.
Kindly help.
Regards, Ravi
From India, Nagpur
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7Kindly help.
Regards, Ravi
From India, Nagpur
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Gratuity Calculation Based on Service Duration
Gratuity is calculated based on the date of joining and the last date in service. Since the employee has worked for 12 years, 7 months, and a few days, he will receive gratuity for 13 years because a fraction of more than 6 months is counted as one year for gratuity calculation purposes. The amount of gratuity is equal to 15 days' salary (last drawn salary) for each year of service.
Gratuity Linked to LIC
In case gratuity is linked to LIC, a trust should be formed. Once you inform LIC of the retirement or resignation of the employee, they will send a cheque to your Gratuity Trust, and from there, you can issue a cheque to the beneficiary.
Regards,
Madhu.T.K
From India, Kannur
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Gratuity is calculated based on the date of joining and the last date in service. Since the employee has worked for 12 years, 7 months, and a few days, he will receive gratuity for 13 years because a fraction of more than 6 months is counted as one year for gratuity calculation purposes. The amount of gratuity is equal to 15 days' salary (last drawn salary) for each year of service.
Gratuity Linked to LIC
In case gratuity is linked to LIC, a trust should be formed. Once you inform LIC of the retirement or resignation of the employee, they will send a cheque to your Gratuity Trust, and from there, you can issue a cheque to the beneficiary.
Regards,
Madhu.T.K
From India, Kannur
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The calculation of Mr. Madhu is quite okay. Only while sending a claim to LIC, intimate the last drawn salary rate to LIC. LIC must have the rate as of your policy renewal date. If any increment is there after renewal, this effect will not be with LIC.
Thanks,
Vidyadhar Bhat
From India, Pune
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Thanks,
Vidyadhar Bhat
From India, Pune
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