Gratuity Calculation for Contractual Employee After Sudden Death: How Is It Handled?

Hi,

If a contractual employee suffered a sudden cardiac attack and passed away the next day after being hospitalized, I would like to know how gratuity is calculated in this situation. Taking into account the last-minute wages of Rs. 11,000/-.

Gratuity Calculation for Deceased Employees

The amount of gratuity depends on the length of service. If your gratuity fund is invested in LIC and is a death cum gratuity policy, the dependents of the deceased would receive gratuity projected to the employee's retirement age.

Service Gratuity Calculation

The service gratuity is 15 days' average salary for every completed year of service. The average salary is obtained by dividing the last drawn monthly salary (e.g., 11,000) by 26. Therefore, if the employee had worked for 3 years, the service gratuity would be Rs 19,038 (11,000 divided by 26, multiplied by 15, and then by 3).