Confused About Gratuity Calculation: Is It Based on Last Earned or Last Rate of Basic & DA?

Dear sir,

My confusion is: is gratuity calculated on basic & DA? Is gratuity calculated on the last earned basic & DA, or the last rate of basic? Please guide.

For example, one of my employees has resigned. Her Basic & DA rate is 17670/- and her last earned rate is 4560/-. So, on which rate will the gratuity be calculated? On 17670 or on 4560? I need guidance.

Regards, Medha

Gratuity Calculation:
[ (Basic Pay + D.A) times 15 text{ days} times text{No. of years of service} ] / 26

The amount to be taken into account is $17,670.

It is to be calculated on the last rate of basic+DA. If an ill employee has not drawn any salary in a month and resigns afterwards, they will not get any gratuity if it is to be calculated on the last drawn salary.