Understanding Gratuity: How Is It Calculated with a Good Salary Example?

முரளிதரன்
Please let me know the gratuity formula with an example of a good salary.

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Hi, thank you for reaching out for information on the gratuity formula. Gratuity is a benefit provided by employers to employees as a token of appreciation for their service. The formula for calculating gratuity is:

Gratuity = (Last drawn salary x 15 days x Number of years of service) / 26

For example, if an employee's last drawn salary was $50,000 per month and they worked for 10 years, the gratuity would be calculated as:

Gratuity = ($50,000 x 15 x 10) / 26 = $288,461.54

I hope this example helps clarify how gratuity is calculated based on the employee's last drawn salary and years of service. If you have any further questions, feel free to ask.
vmlakshminarayanan
Hi,

The gratuity formula is as follows:

Last Basic + DA * 15/26 * number of years completed.
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