From When Does Gratuity Start For An Employee??

:?: As my title suggests.....
I have an query...
From when does an employee is eliglible for gratuity??
My Company has tied up with LIC for gratuity.
We send in the endorsement of the employee to LIC only after the employee is confirmed in the service.
Is this the basic practise carried out in other companies???
Or the gratuity is applicable from day one of the service??
When is the gratuity form usually filled in???
PlZ help...
Regards,
Swati

If the employee is not an Apprentice then from day 1 the gratuity is applicable but employee eligible to get the amount after completion of 5 years continuous service in same organization.

Dear Swati,
Any employee who complete a tenure of 5 yrs or >5yrs is eligible for the same.
and Upto Rs. 3.50 Lacs is non taxable gratuity amount.
the formula of calculation for the same is :
Total year no. of services*Average salary*15/26
Rgds
Bhagwan Tolani
SR. HR
TM Group
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dear swathi
there are some preconditions
- one should have completed minimum 5 years service in the organisation
- salary means basic salary pklus DA plus any other form of DA
- gratuity is calculasted 15 days salary for every completed year of service
- 15 days salary is (basic+Da) divided by 26 which is again divided by 2 gives 15 days salary
- completed year of service means one should have completed 5 years for the eligibility of the service
- year means 6 month service or more is considered as one year, less than 6 months is omitted
- but basic one should complete 5 years,
Ex: if one's salary is 10000 (including basic and DA) and
i) if has completed 8 years and 4 month, the gartuity is calculated as follows
(10000/26)/2= 15 days salary, since he has completed 8 yrs and 4 months, for calculatio only 8 years is taken into consieration ie 15 days salary(as calaculated above multiflied by 8 will be gratuity
ii) in case he has completed 8 years and 7 months. the 15 days salary calculated like above will be multiflied by 9 will get gratuity ammount
hope i hv clarified all the points
gratuity starts from day one, whethere temporary, porobationary.
- The LIC has got scheme, if your compnay has taken that scheme, then pl send the details of the employee when one joins for duty

nagaraj

Dear Swati,
Most of them have answered your query.
To add on Gratuity is applicable from day one of an emp's joining
(even before his /her confirmation),
But gratuity as you know is given for continous service (5 o >5) in an organisation that remains the same.
Hope its satisfacatory
Regards,
shraddha

AS PER LAW, employee is "entitle" for Gratuity if he had completed min.5yrs of service. The Gratuity Act provides that max of 3.5 lac. There is a formula also. THESE ARE MINIMUM that should be provided to employee for continous 5yrs service. Period of service and Maximum amount depends on generasity of the Employer.