Gratuity Calculation in Case of Death: How Is It Handled?

Can anyone tell me the gratuity calculation in case of death?

Gratuity (In Death Case) = Last Drawn Wages (Basic + DA) * Number of years worked * 15 / 26.

Note: Completion of a minimum of 5 years of continuous service is not necessary in the case of an employee's death.

Please let me know if a person who worked for only 5 months and passed away due to a road accident (while waiting for transportation to reach the office) is eligible for gratuity.

Thank you.

My question is: if an employee passes away after 5 years of service, in this scenario, will the nominee receive a 5-year gratuity or a 58-year gratuity?

Regards,
Sanjeev
HR Executive
Noida

I need clarification on whether we will consider 58 years of service for calculation in the event of an employee's death, or only the completed service years during their employment.

Regards,
Sanjeev
HR Executive
[Phone Number Removed For Privacy Reasons]

(c) on his death or disablement due to accident or disease:
Provided that the completion of continuous service of five years shall not be necessary where the termination of the employment of any employee is due to death or disablement: 13 [Provided further that in the case of death of the employee, gratuity payable to him shall be paid to his nominee or, if no nomination has been made, to his heirs, and where any such nominees or heirs is a minor, the share of such minor, shall be deposited with the controlling authority who shall invest the same for the benefit of such minor in such bank or other financial institution, as may be prescribed, until such minor attains majority.] Explanation .' For the purposes of this section, disablement means such disablement as incapacitates an employee for the work which he was capable of performing before the accident or disease resulting in such disablement.

As per the MP Govt website, the death benefit of Gratuity is calculated based on the individual's retirement age. Please check the website for more information: [Death cum Retirement Gratuity Calculation](http://www.pension.mp.gov.in/gracalf.htm)

It is wrong. As per the Payment of Gratuity Act, a nominee is entitled to the completed years of service only, not until 58 years.

To calculate gratuity in the case of death after working for 7 years, the formula typically involves multiplying the last drawn salary by the number of years of service and a factor of 15/26. This calculation may vary based on the specific regulations and policies of the organization. It is essential to consult the company's HR department or the relevant labor laws to determine the exact gratuity amount in such a scenario. Additionally, seeking guidance from legal or financial advisors can provide further clarity on the process and any additional benefits that may apply in the unfortunate event of an employee's demise.

In case the continuous service (working days) is more than 4 years and 250 days, the employee is eligible for gratuity. The formula for calculation is already provided in the thread.

However, in my experience, where we have settled the gratuity of a permanent worker in case of his death, the LIC settled the full claim considering till age 58 years, though the worker, when he died, was only 35 years old. The MP Govt Website also calculates the death cum retirement calculation on the same basis.

The Gratuity Act, however, is silent in this regard and clarifies only that regardless of years of service, the nominee/legal heir is eligible to claim gratuity in case of the death of the worker/employee.

Hi,

"LIC settled the full claim considering till age 58 yrs."

Yes, the above is true but is subject to the employer opting for a special rider while availing the group gratuity scheme with LIC.