Gratuity Computation

Hi Sivajith....
you cant reduced the BASIC & DA any point of employment once its given and after processing 1st month salary....
its against to law.
any how its a issue of calculation of Gratuity... take last drawn Salary (Salary = BASIC + DA) and (last drawn salary = Actual salary not earned salary)
you will be safe side unless employee object or challenge in the reduction of Basic & DA.

it is unfortunate that he would be a loser for no fault of his but law is law .And it clearly says that last drawn salary is to be taken into consideration.However if his new salary of 9000/- is as a result of his fresh appointment on a lower scale of pay then ignoring this period of service you may pay gratuity for the period he was drawing 15000/- if otherwise eligible.

Mr Sivajith,
PL read s.4(4) of the Payment of Gratuity Act .You have to calculate gratuity on 15000/- for his service upto the date of disablement and on 9000/- for the services after the disablement if you have reduced his wages.
Varghese Mathew
09961266966

hi,
thnx Varghese Mathew....
one more doubt---if the employee worked in salary 15000 for 4 years and 7 months and for 9000 for 3 months. Then how to calculate his gratuity...any rounding off.....?
Regards,
Sivajith S.

In the cited case pay him 5 yrs gratuity on Rs15000/- if the service is uninterrupted.
Varghese Mathew

Hi Varghese Mathew,
so rounded 4y 7 months to 5 years and 3 months to 0 years...right?
Regards,
Sivajith S.

Dear All, if you gothrough the Gratuity act, you can find the below point
For the purpose of computing the gratuity payable to an employee who is employed, after his disablement, on reduced wages, his wages for the period preceding his disablement shall be taken to be the wages received by him during that period, and his wages for the period subsequent to his disablement shall be taken to be the wages as so reduced.