Navigating Gratuity After Employee's Death: Is My Calculation Right and What About Family Entitlements?

Appreciate your help on the below question:

A long-term employee has deceased in hospital after a non-professional illness.

How to calculate the gratuity?

- Age of Employee: 42
- Date of Joining: 01/09/2001
- Date of Expiration: 10/06/2018
- Total Service: 16 years 9 months (= 17 years)
- Salary: 150,000

I would calculate the gratuity as below:
1,50,000 * 15/26 * 17 = 14,71,153 Rs

* Is that calculation correct?
* Is there any additional amount on account of "death gratuity"?
* Is the gratuity to be paid fully to his wife, or partly to his minor kids (being deposited in this case)? (There is no nomination form.)
* The employee has 60 days of negative leave (as the company continued to pay his salary while he was in hospital). Can these leaves be deducted?

Thanks a lot in advance for your opinions.

150,000... Is it the monthly gross? If yes, then correct. Additional money can be paid on account of GRATITUDE for wife or father. Removing 60 days (you already paid, so don't recover) still makes the total years to 17.

"Removing 60 days (you already paid. So don't recover) still makes the total years to 17."

As per the definition of continuous service (sec 2a(1) of the Payment of Gratuity Act 1972), these 60 days of hospitalization also count towards working out total service. Just for information.

Since the member did not file any nomination and has passed away, you must inform the legal heirs to obtain a legal heir certificate. Deposit the calculated Gratuity with the Gratuity Authority under the Payment of Gratuity Act for the legal heirs to claim.

Thanks to all for your contributions.

Regarding the 60 days negative leave: In my opinion, the salary for the 60 days negative leave should be deducted from the gratuity.

In this case:

Gratuity: 150,000 * 15/26 * 17 = 14,71,153 Rs

Negative leave: about 3,00,000

Amount to pay: 11,71,153

Hi,

The calculation has to be on the basic salary plus DA, if any, and not on the gross. Please take this into consideration if the same was missed out.

Thanks and Regards

As per the Payment of Gratuity Act of 1972, Section 4(2) mandates the payment of wages for fifteen days. The term "wages" refers to the sum of basic pay and dearness allowance (DA).

The formula for calculating gratuity is as follows: Last drawn wage * 15 * total years of service / 26.

Ravinder HR,

Kindly read the provisions of Sec 2 of the Payment of Gratuity Act. Continuous service is clearly defined. 60 days of hospitalization leave cannot be deducted.