Gratuity Calculation - PDF Download [Thread 391853]

Any body can explain gratuity calculation with one illustration?

Garatuity = Basic Salary * 15/26 *no.of years served for organisation(Greater than or equal to 5 years).
Example - 1 ) One employee worked 6 years for an organisation his gross salary is Rs. 22,000 and basic salary is Rs 13,000. Then his gratuity amount is as follows
Gratuity = 13,000*15/26*6
Gratuity = 45,000/-
If any mistakes are there please update me.
Regards,
Mahmood.

Hi,
Calculation: W x Y x 15/26
where ,
W = Last Wage drawn i.e., basic + DA (monthly)
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.
Thanks & Regards
Snigdha

Hi,
Gratuity will be calculated on Basic + DA x 15 days Salary (Half Month Salary) / no. working days in a month (i.e., 26 days) x no. of years (no. years service rendered in that organization). In some organizations they won't show DA separately. It will be included in the Basic salary. So we can take only Basic Salary.
Make sure, Gratuity will be eligible those who completed 5 years of service or more. Not less than that. But in few organizations, they will consider it and gives gratuity when one completes 4 years + 8 months service. But it depends upon the Organization please. Not all organizations.
Thanks and Regards.
Nirmala

hi,
Good question cos i also want to know that if an employee expired before 5 yrs of service rendered in that organization then does Gratuity stands valid for that employee or not.
Secondly if the concern expired after completion of 5yrs then the calculation will remain same or any bonus factor will work on that ground.
Regards
Pampa

Gratuity calculation
= Basicx 15 days x years/26 days
Suppose Basic is 10000 & he completed 7 years so we give him = 10000x15x7/26= 40385.00
Regards,
Rajeev Kumar

Just an update:
An employee will be entitled to Gratuity benefits if he / she had put in a minimum of 4 years 10 months and 18 days of continuous service in a company.
This was brought out by the Madras High Court in Mettur Beardsell Ltd Vs. Regional Lab Commissioner ( Appellate Authority under Gratuity Act )
Kindly correct me if I am wrong.

Dear All,
Gratuity will be eligible those who completed 5 years of service or more, but if a employee is expire or permanent disablement then what is the minimum year of service is compulsory?

If an employee was on contract, in any case he will not be eligible for Gratuity. This gratuity is applicable only and if only he is an employee and in the above case of Meena, his period of service is taken only as 4 years and not 5 years.

What I referred is under normal circumstances.
In case of death or retrenchment due to closure of the establishment, an employee will be entitled to Gratuity irrespective of the period of service.