Formula for Gratuity Current Basic * Lenth of service *15 /26 Gratuity is payable when employees completed his /her lenth of service 5year in same organisation. Regards Meera
From India, New Delhi
Hi there,
I had worked in the co for 4yrs now including (1yr of Trainee & 1yr probation) I would like to know am i eligible for availing the Gratuity and whats the procedure for the same. Please Guide me about it. I dont think so my Co is giving me the gratuity when I'm leaving the company. So, I need to know how to avail it as its been deducted every month from my pay for last 4yrs during my training also . Am I eligible for the Grautity or do i need to complete avail the gratuity. Im confused as they deduct the amount pay from the beginning but when it comes to return need minimum of 5yrs.
I would be awaiting for your reply at the earliest

From India, Bangalore
Hi i ve got a doubt. like PF management is done by RPFC is there any government authority for managing Gratuity or its dealt directly by the company itself?
From India, Hyderabad
Hello, Our organization doesn’t give any gratuity though there are more than 10 employees at present. Can we do something about it?
From India, Delhi
Dear Member,
Then approach your area labour office for proper enforcement of this law pertaining to payment of gratuity. It might be possible that none of the employees have become eligible to have gratuity from the employer under this Act.

With Regards,

From India, Delhi
New Delhi, Mar 3: In a major relief to private sector employees, the Union Cabinet on Thursday, Mar 4 has given its consent to increase the gratuity limit from Rs 3.5 lakh to Rs 10 lakh.
From India, Delhi
i have a doubt about extra month how to calvulate gratuity if a aperson works for 6 years and 5 months.and even if he works for 6 years and 7 months. Please suggest
From India, Gurgaon
New joinee whom age is 55 year old and retirement age is 58 so he is eligible for gratuity on retirement(after 3 years of joining).
From India, Gandhinagar
Dear member, No, in this case this new joinee will not be eligible to have gratuity from the employer. Regards, R N KHOLA
From India, Delhi
Gratuity is the payment made by the employer to his ex- employee for his past services. Gratuity is similar to a gift given by employer for appreciation of past services of his employee. The technical definition of gratuity given by ICAI is


Who is eligible for Gratuity?

 As per Payment of Gratuity Act 1972, any employee who has been in continuous service for 5 years is eligible for gratuity.

 During the above mentioned 5 years, employee is eligible for casual leave and sick leave without affecting his eligibility.

 In case of death of an employee, the above condition 5 Years of continuous service is not applicable i.e. even if an employee dies

After 2 years of service, he/she is still eligible for gratuity.

The eligibility of an employee is predefined in HAPA (Human resources And People Appreciation). Gratuity in HAPA is auto calculated for the employees. A task is auto generated for the HR to process the same.

How is gratuity calculated?

a) Gratuity calculation formula for employees receiving monthly salary

When calculating completed years of service, if an employee worked for more than 6 months, it will be considered as full year.

Example: Employee worked for 14 years and 7 month, then completed years of service = 15 years

Example: Employee worked for 14 years and 5 months, then completed years of service = 14 years

Example: Employee worked for 14 years and 6 months, then completed years of service = 14 years

Last salary drawn = basic salary + dearness allowance

In HAPA, the HR need not to calculate the gratuity manually for the employees. It gets auto calculated for all the eligible employees and also a task is thrown to the HR to process the same.

b) Gratuity calculation formula for piece rated employees

(Workers receiving payment on the basis of the number of pieces produced)

Gratuity shall be calculated as follows:

Last drawn wages *15/26 *completed years of service

Completed years of service are calculated in the same way as for employees receiving monthly salary.

Last drawn wages are computed by taking average of the total wages received by him for a period of three months immediately preceding the termination of his employment. While computing daily wages, the total wages of last three months is to be divided by number of days the employee actually worked, and not by the number of days or the number of working days in the said period of three months.

Example: A piece rated employee received Rs.30,000 during the last three months before his retirement. The factory had 60 working days in the last three months but the employee came to work for only 30 days.

Last salary drawn will be calculated as rupees 30,000÷30= Rs.1000

In HAPA (Human resource And People Appreciation), whichis a complete HRMS application used by small and medium scale companies across the globe, gratuity is automatically calculated. HAPA automatically generates a task for the HR to remind/process gratuity of an employee on the completion of 5 years in the organization. At the same time, an email is sentautomatically by HAPA, to congratulate the employee for the completion of 5 years. This also maintains a “personal touch” at the workplace and delights the employees. The “personal touch” in a business is very important and essential for employee satisfaction & retention.

For more details about HAPA click the link below:

Welcome to G7CR Technologies India Private Limited | G7CR Technologies India Private Limited <link updated to site home> ( Search On Cite | Search On Google ) <link updated to site home> G7 CR Technologies

Maximum Amount of Gratuity

The amount of gratuity cannot exceed Rs 10, 00,000 (10 lacs). Even if it exceeds, maximum amount payable by employer shall be Rs 10, 00,000.

When is Gratuity Payable?

Gratuity is Payable on employee’s Superannuation, Retirement or death (whichever is earlier).

In case of death of an employee, gratuity is paid to their legal heirs (nominees)

Every employee who has completed one year of service is required to make a nomination. This nomination should be made within 30 days of completion of first year of service.

This nomination should be made in the favor of a family member. A nomination made in the name of any other person is void. However,“if the employer does not have any family that is when he can make a nomination in favor of any person”. But the employee will be required to make a fresh nomination within 90 days of acquiring a family.

Payment of Gratuity

After Gratuity becomes Payable , employer is required to pay it within 30 days as per the provisions of Payment of Gratuity Act 1972 .If the employer fails to pay gratuity within 30 days then, he shall be liable to pay simple interest at the rate notified by central government.

With HAPA (Human resources And People Appreciation), the HR does not have to do any manual calculations as mentioned above already. The payroll management feature of HAPA, which calculates the salaries of employees (including PF, TDS, ESI, Mediclaim etc.) also calculates Gratuity. HAPA ensures a timely and error free calculation without an HR keeping an eye on the calendar for reminders. HAPA does it all for you. Click the link for more: Welcome to G7CR Technologies India Private Limited | G7CR Technologies India Private Limited <link updated to site home> ( Search On Cite | Search On Google ) <link updated to site home> ]G7 CR Technologies[/url]

From India, Bangalore

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