How Do You Calculate Gratuity for an Employee Retiring After 20+ Years of Service?

Dear Sir,

I am interested to know how to calculate the gratuity of an employee who retires after completing more than 20 years of service without any break.

Sunita Tyagi

Dear Sunita,

The calculation is the same irrespective of the number of years of service.

CALCULATION

Number of years of service * 15 * (BASIC + DA) / 26

It means BASIC + DA is to be divided by 26, then multiplied by the number of years of service, and finally multiplied by 15.

Thanks,

J. S. Malik

Please find attached the copies of gratuity, TDS, and salary calculation.

Happy Diwali to you and your family.

Hi Ramesh,

I want to request a draft of a written warning for an employee regarding the misuse of office property. Please reply.

Ramesh
HR
9945572100 :icon10:

Hi Sunita G,

Mr. J.S. Malik is correct, but let me clarify one point here: you can't pay a maximum gratuity amount of Rs. 3,50,000/-.

Suppose, according to the calculation (Basic/26 X 15 X number of years of service = Rs. 3,55,000/-). As per the law, you can only pay Rs. 3,50,000/- to the employee. You are not entitled to pay any other amount to a retired employee.

Regards,
Manoj Kumar