Dear friend,
Go thru' the similar qy.in this links:
https://www.citehr.com/593157-gratui...c-da-last.html
https://www.citehr.com/78804-gratuit...tuity-act.html.
If your employees are covered under the Gratuity Act the rule governing this aspect is:
1) The gratuity amount depends upon the tenure (No.of years) of continuous service and 2) last drawn salary.
It is calculated according to this formula:
Last drawn salary (basic salary plus dearness allowance) X 15/26 X number of completed years of service.
An employer can however give higher gratuity than the amount under the prescribed formula.
"Quote""
Sec. " [8] [(r) "superannuation", in relation to an employee, means the attainment
by the employee of such age as is fixed in the contract or conditions of
service at the age on the attainment of which the employee shall vacate the
employment;]
(s) "wages" means all emoluments which are earned by an employee while
on duty or on leave in accordance with the terms and conditions of his
employment and which arc paid or arc payable to him in cash and includes
dearness allowance but does not include any bonus, commission, house rent
allowance, overtime wages and any other allowance.
xxxxxx
Payment of Gratuity Act, 1972
Section: 3
Controlling authority
The appropriate Government may, by notification, appoint any officer to be a
controlling authority, who shall be responsible for the administration of this
Act and different controlling authorities may be appointed for different areas.
Section: 4
Payment of gratuity.
(1) Gratuity shall be payable to an employee on the termination of his
employment after he has rendered continuous service for not less than five
years, -
(a) on his superannuation, or
(b) on his retirement or resignation, or
(c) on his death or disablement due to accident or disease:
Provided that the completion of continuous service of five years shall not be
necessary where the termination of the employment of any employee is due
to death or disablement:
Provided further that in the case of death of the employee, gratuity payable
to him shall be paid to his nominee or, if no nomination has been made, to
his heirs, and where any such nominees or heirs is a minor, the share of such
minor, shall be deposited with the controlling authority who shall invest the
same for the benefit of such minor in such bank or other financial institution,
as may be prescribed, until such minor attains majority.]
Explanation. : For the purposes of this section, disablement means such
disablement as incapacitates an employee for the work which he, was
capable of performing before the accident or disease resulting in such
disablement.
(2) For every completed year of service or part thereof in excess of six
months, the employer shall pay gratuity to an employee at the rate of fifteen
days wages based on the rate of wages last drawn by the employee
concerned:
Provided that in the case of a piece-rated employee, daily wages shall be
computed on the average of the total wages received by him for a period of
three months immediately preceding the termination of his employment, and,
for this purpose, the wages paid for any overtime work shall not be taken into
account.:
Provided further that in the case of [an employee who is employed in a
seasonal establishment and who is riot so employed throughout the year], the
employer shall pay the gratuity at the rate of seven days wages for each
season.