Dear Team,
I joined an enterprise firm in January 2014. The salary slip is included below. Kindly, let us know the calculation of gratuity, as the formula states basic + DA.
BASIC + BASIC II + HRA + CONVEYANCE + SPL. ALLW.
Usha
From India, Bangalore
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I joined an enterprise firm in January 2014. The salary slip is included below. Kindly, let us know the calculation of gratuity, as the formula states basic + DA.
BASIC + BASIC II + HRA + CONVEYANCE + SPL. ALLW.
Usha
From India, Bangalore
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Hi,
In your case, you can consider the entire basic salary (Basic + Basic II) for gratuity calculation purposes. I'm not sure what Basic II entails, but it could be something similar to a special Basic I, which should also be taken into account.
From India, Madras
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1015In your case, you can consider the entire basic salary (Basic + Basic II) for gratuity calculation purposes. I'm not sure what Basic II entails, but it could be something similar to a special Basic I, which should also be taken into account.
From India, Madras
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There is a rule that gratuity should be calculated only on Basic wages and Dearness allowance. If the allowances like Special allowance are a component of salary paid to all the employees in the establishment, that will also be considered for gratuity calculation. The Act defines the term wages as total emoluments with the exemption of commission, overtime wages, HRA, bonus, and similar allowances. The exclusion part is not exhaustive but it should be similar to those mentioned.
From India, Kannur
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From India, Kannur
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Hi Ushsniaha,
I presume the basic II represents special pay considered to be part of Basic, common in government and PSUs, mostly carved out from the FDA/VDA emerging (merging part of DA) out of wage settlement. If yes, then this basic II can account for gratuity computation. So, the combination of basic + DA / 26 x 15 x the number of qualifying years. (15 days' salary for every year of qualifying service).
From India, Bangalore
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I presume the basic II represents special pay considered to be part of Basic, common in government and PSUs, mostly carved out from the FDA/VDA emerging (merging part of DA) out of wage settlement. If yes, then this basic II can account for gratuity computation. So, the combination of basic + DA / 26 x 15 x the number of qualifying years. (15 days' salary for every year of qualifying service).
From India, Bangalore
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Dear Usha,
Gratuity is calculated using the formula: Gratuity = (Basic + DA) × 15 × Years of Service / 26.
Only Basic and DA are included; HRA, Conveyance, or Special Allowance are excluded. Kindly share your Basic + DA and years of service for an accurate calculation. <a href="https://basketballstars-game.io">basketball stars</a>
From Vietnam, Hanoi
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Gratuity is calculated using the formula: Gratuity = (Basic + DA) × 15 × Years of Service / 26.
Only Basic and DA are included; HRA, Conveyance, or Special Allowance are excluded. Kindly share your Basic + DA and years of service for an accurate calculation. <a href="https://basketballstars-game.io">basketball stars</a>
From Vietnam, Hanoi
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Under which section of the Act is it stated that only basic wages and DA will be considered for the calculation of Gratuity? Please share it with me. Also, please share where basic wages are defined in the Act.
Thank you.
From India, Kannur
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Thank you.
From India, Kannur
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The interpretation of 'Wages' keeps on being debated time and again. For better clarity, the extract of the Act may be noted -
Section: 2 Definitions. In this Act, unless the context otherwise requires:
(a) "appropriate Government" means -
(q) "retirement" means termination of the service of an employee otherwise than on superannuation;
(r) "superannuation," in relation to an employee, means the attainment by the employee of such age as is fixed in the contract or conditions of service at the age on the attainment of which the employee shall vacate the employment;
(s) "wages" means all emoluments which are earned by an employee while on duty or on leave in accordance with the terms and conditions of his employment and which are paid or are payable to him in cash and includes dearness allowance but does not include any bonus, commission, house rent allowance, overtime wages, and any other allowance.
It's seen questions arise regarding many components of emoluments as they are not common and identical across many sectors. Generally known are Basic and DA. Whereas differences arise regarding various allowances and other benefits. While Sec. 8(s) clearly states exclusions viz bonus, commission, HRA, OT, AND ANY OTHER ALLOWANCE. Which amply clear 'any other allowance.' But the fact remains disputes and differences are never-ending. Any contentious components can only be clarified by court cases. As such, it's not appropriate to pass judgment regarding what is to be included and what are all to be excluded.
For example, Anglo French Textiles Ltd. Pondicherry Vs. Labour Court-Madras HC (22.7.1980) regarding 'incentive wages' paid forms part of 'Wages' for gratuity computation. And there are many such cases dealing with such components.
From India, Bangalore
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Section: 2 Definitions. In this Act, unless the context otherwise requires:
(a) "appropriate Government" means -
(q) "retirement" means termination of the service of an employee otherwise than on superannuation;
(r) "superannuation," in relation to an employee, means the attainment by the employee of such age as is fixed in the contract or conditions of service at the age on the attainment of which the employee shall vacate the employment;
(s) "wages" means all emoluments which are earned by an employee while on duty or on leave in accordance with the terms and conditions of his employment and which are paid or are payable to him in cash and includes dearness allowance but does not include any bonus, commission, house rent allowance, overtime wages, and any other allowance.
It's seen questions arise regarding many components of emoluments as they are not common and identical across many sectors. Generally known are Basic and DA. Whereas differences arise regarding various allowances and other benefits. While Sec. 8(s) clearly states exclusions viz bonus, commission, HRA, OT, AND ANY OTHER ALLOWANCE. Which amply clear 'any other allowance.' But the fact remains disputes and differences are never-ending. Any contentious components can only be clarified by court cases. As such, it's not appropriate to pass judgment regarding what is to be included and what are all to be excluded.
For example, Anglo French Textiles Ltd. Pondicherry Vs. Labour Court-Madras HC (22.7.1980) regarding 'incentive wages' paid forms part of 'Wages' for gratuity computation. And there are many such cases dealing with such components.
From India, Bangalore
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Whenever phrases like 'other allowance', 'other forms', 'other devices', 'other agencies' etc. are used in continuation to certain specific expressions, it should be construed to have the same characteristics that the specific expressions have, says the doctrine of ejusdem generis. Therefore, when OT, HRA, Commission, and Bonus are expressly given as exclusions in the definition of wages, any 'other allowance' should have characteristics similar to bonus, HRA, overtime allowance, or commission. The common thing about these allowances is that they are not fixed, and payment of these depends on certain conditions. For example, overtime is paid to those who work overtime, commission is based on specific results, HRA is paid as a compensatory allowance and only to those who reside in leased accommodation and whose spouse does not receive it, bonus is paid subject to profitability, etc. The amount of these allowances will not be mentioned in the employment contract as part of wages. Therefore, if you have an education allowance paid to employees whose children are studying, that allowance is similar to excluded allowances. If you have a Hill station allowance, it will not form part of wages but will fall under 'other allowance'.
It is interesting that many companies have "other allowances" as a component of salary. It should be understood that there is no such allowance called 'other' allowance.
From India, Kannur
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It is interesting that many companies have "other allowances" as a component of salary. It should be understood that there is no such allowance called 'other' allowance.
From India, Kannur
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