Gratuity Payment: What's the Maximum Salary Limit for Eligibility?

Please guide us on what the maximum salary limit is for gratuity payment.

Thank you,
Akhilesh

There is no wage limit in it. It is based on the last basic salary + DA. The gratuity limit is 10 Lacs.

Gratuity is calculated on the last drawn salary (Basic). The formula is: (last basic + DA) / 26 days * 15 days * number of years completed = gratuity.

Thank you.

In addition to Fogat and Amar's answers, I would like to emphasize that for the payment of gratuity, a minimum of 5 years of service is compulsory, and in each year, the number of working days should not be less than 240.

Thanks and Regards,
Sumit Kumar Saxena

If an employee has not worked for 240 days, for example, if they have only worked 230 days in any one year out of five years, are they still eligible for gratuity?

Please guide me on the meaning of the last basic salary used in the above context.

Thank you.

Maximum gratuity = 3.5 L.

Formula for Calculating Gratuity

Basic + D.A. / 26 * 15 * number of years.

Regards,
Ashish
[Phone Number Removed For Privacy Reasons]

Gratuity Calculation Formula

The formula for calculating gratuity is: (Last drawn basic + DA) * 26 * 15 * Number of years worked.

Regards

Do Private Companies Pay Gratuity?

I've only heard about gratuity in government jobs but never in any private companies. Could someone clarify if private companies also pay gratuity?

Regards.

I would like to know the current formula to calculate the gratuity applicable to an employee who has worked for ten years in a self-financing college run by a trust in Coimbatore, Tamil Nadu.

Well, the gratuity amount is limited to 10 lakhs, but there's no salary limit defined for eligibility for gratuity.

Thank you for your quick response to my query regarding the gratuity formula. I would like to understand the formula that needs to be followed as per labor rules for the encashment of non-availed earned leave. I have been employed at a Trust in Coimbatore, Tamil Nadu.

Once again, thank you.

Regards,
Raman

Gratuity Calculation Formula

Gratuity is calculated on the last drawn salary (Basic). The formula is: last basic + DA / 26 days * 15 days * number of years completed = gratuity.

Dear All, "DA" means Dearness Allowance. In my case, the Basic is Rs. 6500/-, but there is no information on Dearness Allowance in the Appointment Letter and Payslip as well. If there is no Dearness Allowance for me, what is the calculation? Is it Basic / 26 days * 15 days * number of years completed = gratuity? (Is it correct?) Why are 26 days and 15 days used in the formula?

My Gratuity Contribution is Rs. 312/- for the month.

Waiting for your reply, Seniors.

Regards

Dear Bunti,

Please note that the maximum gratuity amount is 10 lakhs.

Regards,
Manokavi

Understanding Gratuity Calculation

26 days counted as working days in a month means if you divide your last basic + DA by 26 days, you will get one day's salary. As per the Gratuity Act, per year, you get 15 days' salary. This means you can calculate it like this: your basic + DA / 26 = one day of gratuity, then multiply by 15 days to get one year of gratuity, and then multiply by the number of years you have completed in your service.

Regards.

Dear All, please guide me. If an employee has completed 4 years, six months, and one day, are they entitled to gratuity?

Regards,
Manas

Can anyone tell me the eligibility for the entitlement of gratuity for any employee and what role does age play in this factor?

Regards,
Vivek

Dear Manokavi, can you explain in detail the gratuity amount (10 lacs)?

Regards,
Vivek

Gratuity Calculation Guidelines

There is no maximum limit for gratuity calculation.

Entitlement
- Section 2(e): On completion of five years of service, except in the case of death or disablement.

Qualifying Period
- On rendering 5 years of service through termination, resignation, or retirement.

Wages Definition
- Wages mean Basic + DA.

Wages for Calculation
- Section 2(s): At 15 days' wages for every completed year as if the month comprises 26 days at the last drawn salary.
- Formula: (Basic + DA / 26) * 15 * Number of completed years of service.

Total Ceiling
- Rs. 10,00,000