Gratuity Eligibility: How Do You Calculate It After 5 Years of Service?

Gratuity Eligibility and Calculation

If an employee has completed more than 5 years of service in the same company, is he eligible for gratuity, and on what basis is the amount of gratuity calculated? Please clarify this for anyone with a calculation.

Regards,
Rakesh

Also, you can visit this thread https://www.citehr.com/219335-about-gratuity.html where numerous people have discussed the same subject. I'm sure you'll find more details there.

If any person has completed 5 years of service, they are eligible for Gratuity. In this case, for example, if someone has worked for 5 years and 3 months, it will be considered as 5 years. However, if the individual has worked for 5 years and more than 6 months, the additional time will be added to the next year.

Gratuity Calculation

Gratuity Calculation = (Basic Salary x 15 x Number of years) / Standard working days

This calculation is as per the act.

Thank you.

Formula for calculating Gratuity: ((Last drawn basic / 26) * 15) * Number of Years of Service.

Note: For Gratuity eligibility, an employee should serve at least 5 years.