Understanding Gratuity Calculation and Employee Benefits in a Proprietary Firm

Dear Sir,

My consolidated salary is Rs. 30,000, and I have completed 27 years of service in one organization. However, for PF and ESI, they are showing my salary as Rs. 14,900. How much gratuity will I receive in a proprietary firm of a manufacturing SSI unit in Bengaluru?

Thank you.

Dear Sunidhan,

The formula for the calculation of gratuity is as follows:
Gratuity Calculation: Basic + D.A. multiplied by 15 X Number of completed years of service / 26.

In your case, the amount of gratuity comes to - 30,000 X 15 X 27 = 12,150,000 / 26 = Rs. 4,67,307.

The maximum amount of gratuity has recently been increased to Rs. 10 lakhs from Rs. 3.5 lakhs.

BS Kalsi

If the amount for PF is shown as 14900, then the gratuity calculation will be based on 14900 and not on 30000. The calculation would be 14900 x 15 x 27 / 26...

Dear Sunidhan,

If PF is deducted from a salary of Rs. 14,900, gratuity will also be calculated on Rs. 14,900. Therefore, the gratuity amount is Rs. 14,900 x 27 x 15 / 26 = Rs. 232,096/-

Abbas.P.S

If, as per the salary register and government records, your salary is 14900/-, then your gratuity calculation will be 14900/26*15*27 = 232096/-.

Dear Mr. Sunidhan,

Gratuity Requirement: The employee shall have completed 5 years of service. (The Madras High Court stated that 4 completed years of service and in the 5th year, if the employee completes 240 days of service (as per the Factories Act), they are eligible for gratuity.)

Calculation: (BASIC + DA / 26) X 15 X NUMBER OF COMPLETED YEARS OF SERVICE

BASIC + DA: As shown in the pay bill (The basic shown for PF will be the basic for gratuity as well.)

COMPLETED YEARS OF SERVICE: Date of leaving - Date of joining. (For a fraction of a year: less than six (6) months shall be limited to the completed years, i.e., 26 years 4 months = 26 years / more than six months, it can be treated as one more year, i.e., 26 years 8 months = 27 years.)

I am concerned that the above calculation may be incorrect.

Regards, Yagniah K

As only Rs. 14,900 is shown for EPF, in the absence of DA, gratuity will be calculated only on the basis of Rs. 14,900. Though you are getting Rs. 30,000 as consolidated salary, the company will only consider Rs. 14,900 as basic.

Varghese Mathew Labor Law Consultant 0471 2542059

Dear Sunidhan,

Can you please answer the following:

(1) How do you confirm that your salary is consolidated? Do you have any supporting documentary evidence such as salary slips or annual increment sanction orders issued by your employer?

Gratuity has to be calculated on the basis of the last drawn salary. The components of the salary would be Basic pay + DA + UG allowance (if any). The rest mentioned by Yagniah K is absolutely right.

Dear Sir,

How to cancel shop and establishment registration online in Rajasthan?

Regards,
Vinay Kumar