Gratuity Calculation for 4 Years, 8 Months, and 18 Days: How Do You Figure It Out?

Hi,

If gratuity is eligible for 4.8 years, then please share how the calculation is to be done for 4 years, 8 months, and 18 days.

Dear Satish,

As you can see from the formula, you don't need to calculate gratuity for months and days; you just need to calculate it based on 5 years.

Gratuity Calculation for 4.8 years.

Basic X 15 days X 4.66/12

Please convert 0.8 years into months, i.e., 8/12 = 0.66.

Sorry, please ignore the previous calculation.

BasicX: 15 days X 4.66/26

Please convert 0.8 years into months. i.e. 8/12 = 0.66

The gratuity is to be calculated as per the formula given below:

Gratuity Calculation = [(Basic Pay + D.A) x 15 days x No. of years of service] / 26

Where, D.A = Dearness Allowance.

In calculating the number of years of service, the time period in excess of six months is considered as one year, and less than six months is not reckoned (See Section 4(2) of the Act).

So in this case, it will be [(Basic Pay + D.A) x 15 days x 5] / 26. There is no fractional calculation involved.