Understanding Gratuity: How Is It Calculated When an Employee Passes Away Early?

Hi folks, I have a query. Suppose an employee joins an organization on 12/06/99. His salary details are given below: Basic: 13000, DA: 4000. The employee expires before completing five years of service. Can anybody tell me how much gratuity has to be paid to the nominee? Whether the Basic and DA will be taken as the same and gratuity will be calculated for the entire service period which the employee was supposed to complete.

Regards,
SLN

Dear Sir,

He has to be paid gratuity for the service he has rendered. Basic salary and Dearness Allowance (DA) will be taken into consideration while calculating gratuity.

Thank you,
J. S. Malik

Dear friend,

In the case of the death of an employee, the 5-year continuous service criteria for the payment of gratuity is not required. Gratuity shall be paid up to the period the employee has worked before death.

Thanks,
Mahesh Pandey

Dear, please do approach the L I C Office for further inquiry in the matter and for obtaining formats.

Thank you.

First of all, let me clarify one thing: Is the gratuity fund maintained by the employer or by an outside agency such as LIC, etc.?

1. If the employee is maintaining it, they need to pay only for the services the employee has rendered (BASIC + DA should be considered for calculation purposes).

2. If it is managed by LIC or another insurance company, have you taken an insurance scheme or only gratuity? If there is insurance coverage, then the insurance company will pay the gratuity until the superannuation age.

I hope this is clear.

Siva

Dear SLN,

Gratuity will be applicable only when the employee completes his or her service for 5 years.

Dear,

In case of the death of an employee, the requirement of completing 5 years is not applicable.

Regards,

R.N.Khola
(Labour Law & Legal Consultants)