Gratuity [Thread 247880]

Dear All,
can anybody tell me the meaning of gratuity & why & when it is paid?
regards,
Minal

Dear Minal,
Plz go through Payment of Gratuity Act, 1972 & the Rules made thereunder for your query.
With Regards,
R.N.Khola

Gratuity will be applicable for employees who have completed 5 years of continuous service and above in the same organisation.
Formula of Gratuity:- Last drwn salary(Basic+DA)*15*No.of yrs of Service
26
Max.Limit:- 3,50,000
regards,
Prasad s.Pandit

Gratuity is a gratuitous payment made by the employer to an employee for the services rendered by the latter for the former. Therefore, it is a reward for the long service rendered by the employee. In other words, it is paid when an employee leaves the company after having served the company for a quite long time. In order to give shape to what constitutes 'long service' and to give a definite idea as to what shall be the amount payable, Kerala State enacted the Payment of Gratuity Act for the first time which was followed by West Bengal and later on by the present central Act of 1972.
As per the Act gratuity is payable at the time of an employee leaving service after completing at least five years of service. The amount of gratuity is calculated on the basis of salary of the employee at the time of exit and it is at the rate of fifteen days salary for every completed year of service.
Regards,
Madhu.T.K

Dear Minal,
According to The Payment of Gratuity Act 1972, every organization must be paid gratuity amount to employees who are completed 5 years of service with 240 days in each and every year. This amount will be paid at the time of Superannuation or resignation of an employee.
The above said condition is not applicable to the death cases. In death cases 5 years of service is not a mandatory.
Off late the Govt.of India has enhanced the existing ceiling from 3,50,000 to 10,00,000. The gratuity caluculation is
Wage last drawn(Basic+DA)/26*15*No.of years of service.
Venki

Dear Venki,
If the enhancement has been made under the P G Act, 1972 then if possible provide us the notification of this amendment.What is the date of applicability.
With Regards,
R.N.Khola

gratuity is a scheme to motivate people to serve for longer durations with the same employer.anybody who has served an organisation more than 5 years is eligible for gratuity. a portion of the last drawn salary would be multipied with no. of years of service and paid out to you when u leave an organisation after years of service.