Understanding Gratuity: How to Calculate It and Determine Eligibility in Your Company

What is meant by gratuity? How to calculate gratuity in a company? Who is eligible for gratuity? What are the gratuity forms?

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Gratuity is a statutory amount given by the employer to an employee if the employee completes 5 years of continuous service in the same company. If an employee joins a company in roles for which they are eligible from the first day, the calculation is as follows:

Last drawn base * 15/26 * number of years of service.

In the case of death, the 5-year requirement does not apply. The amount can only be claimed in the event of separation from the company. The forms used for gratuity are:

- Form F: self-declaration.

I hope you can somewhat understand.

Regards,
Sendil G

As Mr. Sendil detailed, the minimum service required for the payment of gratuity is 5 years. If there is a fraction of years in excess of 6 months, it will be rounded up to one year and added to the completed years. If the fraction is 6 months or below, it will be neglected.

Gratuity Calculation Formula

The formula to calculate gratuity is Service x (Basic + DA) x 15/26.

Regards,
Abbas.P.S

Dear Madhu, Please refer to section 4 of the Payment of Gratuity Act, 1972 for the calculation of the gratuity amount. Regards, R.N.Khola

Gratuity Calculation Help Needed

Dear friends, Can anyone help me with how to calculate gratuity?

With Regards, Madhu

Welcome to CiteHR. Please go through section 2A on continuous service under the Payment of Gratuity Act, 1972 for your query.

Regards,
R.N.Khola

Understanding Gratuity

Gratuity is applicable to an employee who has completed 5 years or more in any service of the company. The formula as per the Gratuity Act is Basic x 15 x number of years in service / 26. After resignation, you can make an application to claim your gratuity by stating your details such as address, date of joining, gross salary, basic salary, number of years completed in service of the company, and your signature.

Regards,
Aparna

Gratuity Calculation Formula

Gratuity = 15/26 * (Number of years of experience) * Last Basic + DA Drawn

Note: Number of years of experience > 5 years

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