How Do I Calculate Gratuity Without DA in My Payslip? Seeking Advice

I have joined on 12/12/2006 and will be released tentatively on 10/03/2012. There is HRA, but there is no DA as I can see from the payslip/papers. What should be the formula for the calculation of gratuity?

Gratuity Calculation Formula Options

A) [(Basic Pay + D.A) x 15 days x No. of years of service] / 26
B) 1/2 * Average monthly salary * Completed years of service

Regards,
Asish

Dear Ashish, Option A is correct. Otherwise, the calculation should be as follows: basic + DA / 26 x 15 days wages x Number of years of service.

OK

In your case, as there is no DA, you will be eligible for gratuity on Basic only. The Gratuity Formula is: Basic salary / 26 days x 15 days x No. of years of service = ........... (gratuity amount).

Regards,
D. Gurumurthy
HR/IR Consultant

The formula for calculating gratuity is as follows: Last drawn basic salary/26*15*No. of completed years of service. To become eligible, a person should have 5 continuous years of service in the same organization. Even 4 years and 11 months will not be taken for gratuity calculation. But after 5 years, 6 months and above are considered as a year. For example, if a person has an experience of 6 years and 6 months, then it will be taken as 7 years.

Hope your queries are answered.

Friends, please revert back.

Regards,
K S Sivakumaar

Dear Asish,

Kindly calculate gratuity as Basic Pay x 15 x No. of Years of Service / 26.

Regards,
S. Deepak Trivedi

Hi K S Sivakumaar, you are right; you removed my confusion as well. If one employee has completed 5 years and 5 months, how many years would be counted for Gratuity calculation? Would it be 5 or 6?

Thank you.

According to me, it should be calculated precisely, i.e., 65 months, which is nothing but 5.5 years.

Hi, It should be treated as 5 years only. If it is 5 years and 6 months, then it will be counted as 6 years.

Dear K. S. Sivakumaar, I have one doubt. As you said, for gratuity, even 4 years 11 months is not applicable. However, I have read that the minimum requirement is 4 years and 240 days for gratuity eligibility. Could you please explain this discrepancy?

Thank you.

In our organization, we do not have DA but have a meal allowance, which is considered for the calculation of PF. Kindly advise if the meal allowance + basic is to be considered for arriving at the gratuity amount.