Both questions can be written in one thread. Okay. Gratuity is applicable to those employees who have completed 5 years of service in the same organization. The calculation is basic/26*15*number of years.
For Gratuity calculation, the employee has to serve the organization continuously for at least 5 years. The formula will be Monthly Basic + D.A. x 15 days / 26 days X No. of years of service (Continuous). Any service above 6 months can be considered as 1 year of service. For example, 5 years + 7 months can be considered as 6 years of service.
Is it Basic+DA or only basic salary? Because earlier it was only the basic salary multiplied by 15 days multiplied by the number of years in service (based on the last salary drawn - earlier it was the average of 10 months' basic salary). Is there any change in the formula, and if so, from when?
In PF, basic+DA is considered. Could anybody clarify this, please?
The Gratuity is calculated by taking Basic Salary and DA both into account, and not only Basic Salary. The formula to calculate Gratuity is:
{(Last Drawn Basic Salary plus DA) x 15 days x No. of Years of Service}/26 as it has already been correctly informed above by other members.
Regards,
Gupta
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