Dear sir, i would like to know about the gratuity act and the calculation formula in India (Maharashtra). Regards, Kaushik

3rd February 2008 From India, Mumbai

Labour Laws & Ir
Ghanshyam Pandey
I Am Working In M J & Sons Distillery
Sushilendra B
Human Resources
Sr. Hr Executive
Omshiv Mishra
Sr.hr Executive
Hr Manager
Hr Professional
Mittal Tank
Hr Manager
Area Sales Manager
+12 Others

Payment of Gratuity Act, 1972

Object: It is an Act to provide for a scheme for the payment of gratuity to employees engaged in factories, mines, oilfields, plantations, ports, railway companies, and shops or other establishments.

Applicability: Any Employer of the above noted establishments where 10 or more persons are employed or were employed on any day of the preceding 12 months is liable to pay gratuity to its employees. Once the Act becomes applicable, it continues even if the number of employees falls below ten.

Entitlement: Gratuity is payable to an employee (nominee - in case of death of employee) who has rendered continuous service of five years or more on his termination of employment, superannuation, retirement or resignation. Completion of continuous service of five years is not necessary where the termination of employment is due to death of disablement.

Calculation: W x Y x 15/26 where W = Last Wage drawn i.e., basic + DA
Y = number of completed years of continuous service (six months or less to be ignored and more than six months to be counted as full year.
15 = 15 days salary
26 = No. of working days in a month.

Maximum Limit: Rs.3.5 lacs. (w.e.f 24-09-1997)

Time Limit for application to employer: Employee has to make an application in Form-I to his employer within 30 days from the date of gratuity becomes payable.

To calculate the gratuity: it has the formula

Ex. Number of yrs of service x Last salary drawn (Basic+D.A) X 15

This is the formula to calculate the gratuity.
28th December 2008 From India, Mumbai
We had one employee who was asked to leave the company in 2005. At that time we did not calculate the gratuity properly out of ignorance (not based on the last wages but average of wages over 10 years). He went to the court to seek justice. We now know that the gratuity was not calculated properly.
He never made an application in form-I as mentioned in the post above.
Can we now ask him to make an application and close the issue?
6th January 2010 From India, Pune
To calculate use Gratuity Calculator in the following site
Calculate Gratuity
S. Newton Jenkins
21st January 2010 From India, Madras
Hi, I have doubt; In 5 year period if the person suppose 11 months LOP. Then how to be calculated. Regards, Pushparaj
29th January 2010 From India, Bangalore
Hi I am new into this organisation.Can u plz explain me hw we will calculate gratuity for different ctc. Regards, Loveleen
29th January 2010 From India, Ludhiana
Hey u can use this too.... to calculate gratuity.
Calculate Gratuity
5th March 2010 From India, Nagpur
I would like to know about basic wages of Skilled, Semi Skilled, Unskilled worker in maharashtra.
9th March 2010 From India, Pune
Hi Vrushali
Have gone thro the Gratuity Calculator.
Would be very great, if you could send the other Calculators, as mentioned in the same sheet.
It's so nice.
Thanks in anticipation.
9th March 2010 From India, Hyderabad
Hi Newton Jenkins Will you pls send us the other Calculators as mentioned in the same sheet. Regards vsure
9th March 2010 From India, Hyderabad

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