Greetings,
I guess you are working on the complete designing of a salary structure .Leaves are generally encashed at the time of separation . They are done on the basic pay per day , i.e. basic pay for the month / 22 days , given the fact that you all have five days of wrong in a week. Incase it is six days it would be 26 days .
Gratuity is calculated as shared below. Payment of Gratuity Act, 1972
Object: It is an Act to provide for a scheme for the payment of gratuity to employees engaged in factories, mines, oilfields, plantations, ports, railway companies, and shops or other establishments.
Applicability: Any Employer of the above noted establishments where 10 or more persons are employed or were employed on any day of the preceding 12 months is liable to pay gratuity to its employees. Once the Act becomes applicable, it continues even if the number of employees falls below ten.
Entitlement: Gratuity is payable to an employee (nominee - in case of death of employee) who has rendered continuous service of five years or more on his termination of employment, superannuation, retirement or resignation. Completion of continuous service of five years is not necessary where the termination of employment is due to death of disablement.
Calculation: W x Y x 15/26 where W = Last Wage drawn i.e., basic + DA
Y = number of completed years of continuous service (six months or less to be ignored and more than six months to be counted as full year.
15 = 15 days salary
26 = No. of working days in a month.
Maximum Limit: Rs.3.5 lacs. (w.e.f 24-09-1997)
Time Limit for application to employer: Employee has to make an application in Form-I to his employer within 30 days from the date of gratuity becomes payable.
To calculate the gratuity: it has the formula
Ex. Number of yrs of service x Last salary drawn (Basic+D.A) X 15
26
Please do consider the following links while working on the structure.
https://www.citehr.com/227160-ctc-rs-1-00-000-pm.html
https://www.citehr.com/98502-incenti...employees.html
Regards,
(Cite Contribution)