Need Help Urgently: How Do I Calculate Gratuity Correctly?

Hi,

Can anybody help tell me how to calculate gratuity? It's urgent, please help.

Regards,
Neha

Neha,

The Act provides for the payment of gratuity to workers employed in every factory, shop, and establishment or educational institution employing 10 or more persons on any day of the preceding 12 months. A shop or establishment to which the Act has become applicable shall continue to be governed by the Act even if the number of persons employed falls below 10 at any subsequent stage.

All the employees, irrespective of status or salary, are entitled to the payment of gratuity on completion of 5 years of service. In case of death or disablement, there is no minimum eligibility period. The amount of gratuity payable shall be at the rate of 17 days' wages based on the rate of wages last drawn, for every completed year of service. The maximum amount of gratuity payable is Rs. 3,50,000/-.

Formula: Last Wages * 15 * No. of services / 26

Also, check out the link below:
Calculate Gratuity

Thanks,
Nilangshu

Gratuity is calculated from the Date of Joining (DOJ), INCLUDING the training period. It is given willingly by the employer as a reward for the appreciation of the services provided by the employee for 5 continuous years. The formula is as follows: (Basic + DA) * 15 / 26 * Number of years worked. Please note that gratuity shouldn't exceed 5% of the basic salary. I hope this information helps you.

Regards

Dear Ms. Nilangshu,

Thank you very much for the detailed information provided by you. It was really urgent. Thanks again. In case I have any queries, I will ask you.

Regards,
Neha

Dear Colleagues,

I need information regarding payment of wages: By which clause of the Act are payments calculated for 26 days instead of 30/31 days in Maharashtra State? (Why don't we consider weekly offs?)

Regards,
Satish Kulkarni
Email: kulkarni_satish@yahoo.com

Dear Neha,

Please find the formula to calculate gratuity:

BASIC + DA (Last Pay drawn) X 15 / 26 X No. OF YEARS WORKED.
Basic * 15 / 26 * No. of years worked.

Thanks,
Jagan :)

Minimum requirement for gratuity is 5 years of continuous service. After completing 5 years and 6 months, service above 6 months is counted as a full year, whereas service less than 6 months is not counted.

Calculation of gratuity is as follows:
Gratuity = (Last salary * Number of years of service * 15) / 26

For example:
Gratuity = (5000 * 10 * 15) / 26
= 28846.15

Regards,
I will be happy to help you on 9818785678

Dear Neha,

Gratuity is subject to payment for continuous service of 5 years. The formula is Last Basic x 15 days x number of years of service / 26. The slab has now been revised from Rs. 3,50,000.00 to Rs. 10,00,000.00.