Re: How To Calculate Graduity - Doc Download

Hi Sir,
Please advice on how to calculate Gratuity.
Thanks
Rekha Yadav

Hi,
Please note the formula:
Gratuity = Last drawn salary * (15/26) * Number of years of experience

Dear Rekha,
Gratuity will be calculated only on Basic Salary( Basic+ DA) and not on gross salary.
Gratuity - Last drawn Basic Salary(Basic+DA)/26 * 15 * Total no. of years.
Gratuity is normally calculated only for the person who had completed 5 yrs of service. There is a Judgement from Honorable Supreme court that a person who had completed 4 yrs and 8 months is eligible for Gratuity but this is applicable mostly where the employee has been terminated or lay-off, and also he has to work for 240 days in each year. Even the resigned employee can also apply but mostly it will be through legal proceedings.
If the employee had worked for less than six months the gratuity is calculated till the preceding year and if the employee works for more than 6 month then the gratuity has to be calculated for the full year.
For deceased employee, there is no 5 yrs or 4yrs and 240 days rule. If he has worked for more than 6 months his family has to be given 1 yr gratuity and so on.

Hi Sir,
Thanks for your reply, but for example employee had worked almost 4 years and 198 days (in 5th year).
Is he eligible for the Gratuity?
And also confirm that you have mentioned "if the employee works for more than 6 months then the gratuity has to be calculated for the full year" it means the employee who was given almost 6 months to company he is eligible for gratuity?
Please confirm the gratuity rule its depend on company to company or its same for all companies?

Dear Rekha,
From your problem it appears that the concerned employee has hot completed five years of continuous service and hence he is not entitle for gratuity. But if works for more than 240 days in the last year he would be entitled for gratuity.
Hope this solve your problem
Avinash Kanoray

Hi,
Please confirm is there any form that dependent has to filled up to claim Gratuity incase of employee's detath.
Also pls confirm what all formalities we have to do if an employee expired and we need to close his file and provide all claims to his dependents.

Dear Experts,
Some of the Companies deducts the Gratuity amount from the monthly CTC. Is it correct? Anyone please clarify the same. Thanks to all
Ram

Dear Ram,
It is not mean that they are deducting Gratuity from the CTC, they are showing their contributions towards Gratuity in CTC (Cost to the Company)... when employee is eligible to get Gratuity, then this amount will be paid by Employer.

Hi,
gratuity the correct formula is = basic + da x no of years x 15/26
regards,
chagi manjunatha
9964694963

Respected fellow Members,
forwarding the Gratuity Rules, applications, calculations & forms in the PDF attachment file.
Regards.
Ravi.V