Gratuity Eligibility and Calculation: Am I Entitled After Policy Changes During My Employment?

Eligibility for Gratuity

My question is: If I joined a company in 2012 and at that time they did not have the gratuity benefit, but later in 2017, they implemented gratuity in the company. In case I leave the company in 2018 and was enrolled in the gratuity program from 2017 to 2018, but my total service would be 6 years with the company, will I be eligible to receive the gratuity amount? If yes, then what would be the calculation?

Gratuity Calculation Based on Salary Changes

Additionally, every year our basic salary changes, and we receive 4.81% of it as gratuity. Will we receive the gratuity based on the last drawn basic salary at the time of retirement, or will it be calculated according to the deduction year-wise?

Hi,

You are entitled to gratuity, and it will be calculated based on your last drawn salary.

Thank you.

Your gratuity will be calculated as follows:

(basic salary + DA if any) * number of years * 15/26

Please let me know if you need any further clarification.

Clarification on Gratuity Introduction and Eligibility

Your query is a bit confusing. You mentioned that your company introduced gratuity in 2017. What does it mean? There is no need to introduce gratuity in a company; it is automatically applicable to all industries employing 10 or more employees as per the law.

You further stated that the company is paying you gratuity at 4.81% every year; this is confusing. Could you please elaborate on your type of employment, whether contractual, project-based, or regular?

Please also confirm if, before introducing gratuity in 2017 (as per your statement), the company obtained any undertaking or any type of contract regarding gratuity eligibility. If not, you are eligible for gratuity on the last drawn salary (Basic + DA, if any) after completion of 5 years of continuous service.

Regards,
Suresh