Gratuity Calculation Help: How Much Can I Expect After 6 Years at My Job with a 5000 Salary?

I am working with a private company in JAFZA since May 2005. Now, I have received a termination letter (with a notice period of 30 days). By the end of my tenure, I will have completed 6 years and 4 months. My question is, how will my gratuity be calculated if my basic salary is 5000? How much gratuity amount can I expect to receive? Please assist me with this matter.

Gratuity Calculation Formula

The formula for calculating the Gratuity amount is as follows: Last drawn salary x No. of years served x 15 divided by 26.

Accordingly, the solution to your query is: 5000 x 6 years x 15 / 26 = 17308.

Your Gratuity amount is 17308.

Gratuity Calculation for Your Company

For your company, the Payment of Gratuity Act is not applicable. The calculation is as follows:

(Preceding 10 month's salary / 10) * 15 / 30 * total service years.

Hi Ramachandram, in your calculation, you calculated for 6 years only. What about the 4 months? We should consider the 4 months. Should we take only 6 years?

Thank you.

Gratuity Calculation Formula

The formula for calculating gratuity is: Basic + D.A * 15/26 * number of years in service.

First, tell me what your last basic salary was at the time you left the company. Please provide me with the exact details so that I can assist you.

Regards,
Neha

Gratuity Calculation Formula

The formula for gratuity calculation is as follows:

\[ \text{Gratuity Amount} = (\text{Basic} \times 4.8\%) \times 12 = a \]

Then,

\[ a \times 6 = \text{Your Gratuity Amount} \]

The calculation of 4.8% is as follows:

\[ \frac{15}{312} \times 100 = 4.8\% \]

For example, if the basic salary is $5000, the calculation would be:

\[ 5000 \times 4.8\% = 240 \]

\[ 240 \times 12 = 2880 \]

\[ 2880 \times 6 = 17280 \]

This will be your gratuity amount.

Gratuity Calculation for Partial Years

For purposes of calculating payable gratuity, a period of 6 months or more is taken into consideration and treated as if the employee has worked for one full year. This applies only after he/she completes the qualifying criteria of working for a continuous period of 5 years in the organization.

In the present case, our friend has worked for a period of 6 years and 4 months. Therefore, he will be entitled to gratuity for 6 years only.

The amount calculated, assuming the salary is Rs. 5000/-, would be:

5000/26 x 15 x 6 = Rs. 17,308

I hope I have answered your query to your satisfaction.

Best wishes,

Vasant Nair

"Hi Ramachandram, in your calculation you calculated for 6 years only. What about the 4 months? Should we consider the 4 months, or should we take 6 years only?"

Subject: Re: Gratuity Calculation

I agree with the same clarification given by Mr. P. Ramachandran.

Regards,
Vinod Chauhan

In your calculation, you calculated for 6 years only. What about the 4 months? We should consider the 4 months; should we take only 6 years?

Gratuity Calculation Under the Payment of Gratuity Act, 1972

Under the Payment of Gratuity Act, 1972, qualifying service above 6 months is to be rounded off to the next full year. This means that the period below six months is to be ignored.

Thanks & regards,

First, confirm what JAFZA is. Are you in Dubai? Then, the calculation for gratuity will change.

Eligibility for Gratuity

Eligibility for gratuity will only arise in the case of resignation, termination, or discharge of an employee. Additionally, gratuity is only eligible for employees who have completed 5 years of service in a company. It is calculated based on 15 days' salary per year of service, with the maximum amount of gratuity being Rs. 10 lakh.

Gratuity Calculation Formula

The formula for gratuity calculation is as follows: current basic/26*15 * Number of years in service.

Regards,
Sheetal

Are you working in Dubai Jebel Ali Free Zone? If yes, then the gratuity calculation of India is not applicable there. They have their own JAFZA employment guidelines in Dubai. You can download them from the net. If you work in the Jebel Ali Free Zone of Dubai and are not receiving employment guidelines, write to me on my email, and I will send them to you. I was working in JAFZA in 2006.

Thanks

Please provide me with the full details about the gratuity calculation. Specifically, I would like to understand the meaning behind the numbers 26 and 15 in the calculation.

Thank you.

Your friend's service length is 6 years and 4 months. A period of 6 months or more is treated as one year, and time less than 6 months will be considered as 0 years. Therefore, your friend is entitled to 6 years of gratuity only.

Gratuity Calculation Formula

The formula for Gratuity is:
(BASIC + DA / 26) * 15 * Number of years in Service
(5000 / 26) * 15 * 6 = 17307.69

So, he is entitled to Rs 17308 only.

Regards,
Purushottam Dass Matta
Sr. Executive Admin & HR
[Phone Number Removed For Privacy Reasons]

I work in a private limited company. My gross salary is Rs. 30,000 per month. The company issued a one-month notice for termination. I have been working for the last 9 years. The company deducts 12% for my PF on Rs. 6500. Now, how much gratuity will they pay, and on what basis do they calculate it?

Regards,
Jagan

What does the number 15 represent in this formula: 5000/26x15x6 = Rs. 17308?

5000 is the basic salary, 26 is the total earned days of salary, and 6 is the gratuity years. What will the 15 represent?

Clarification on Gratuity Calculation

It seems a lot of people are confused about the numbers 15 and 26 used for the calculation of payments. Let me clarify the same.

As per the Gratuity Act of 1972, paragraph 2 states, "For every completed year of service or part thereof in excess of six months, the employer shall pay gratuity to an employee at the rate of fifteen days' wages based on the rate of wages last drawn by the employee concerned."

This means that for every year of service, 15 days' wages are payable. To calculate the daily rate of wages, the monthly wages should be divided by 26 days (excluding Sundays out of a 30-day month).

The formula for calculating the payment of gratuity is: Current wages x Number of years in service x 15/26 = Payment of Gratuity.

Regards,
Kumar Anand
HR - SAMSUNG