Handling Gratuity for an Employee Who Passed Away in an Accident: What Are the Steps?

Sir, one of the employees died in a road accident. She had completed 2 years of service. How do we pay gratuity? Her age was 28.

Kindly advise on the calculation.

In cases of death, even with 2 years of service, gratuity is payable at the rate of 15 days' salary (Basic + DA) per year of service. Therefore, pay the nominee gratuity as per the following formula:

= (one month salary / 26) X 15 X 2

Thank you.

Her dependents shall be paid gratuity for the service period, i.e., two years, calculated at the rate of 15 days' salary for every year of service. Roughly, it will come to one month's salary. If you have any gratuity policy taken with a death cum gratuity scheme, then the dependents would get gratuity based on a valuation considering salary and service till superannuation, i.e., 58 or 60, as the case may be.

Gratuity Calculation

Gratuity is calculated as follows: Monthly Salary / 26 x 15 x 2 years (service)

Hi,

In the case of an employee's death, there is no minimum eligibility period as the amount depends entirely on the tenure of service and the last drawn salary. As per the Gratuity Act, the gratuity amount is payable up to the date of death, irrespective of whether the employee completed five years or not. The maximum gratuity amount receivable is Rs 20 lakhs.

If the employer has covered the employees under a Group Gratuity Scheme with any insurance company, then the insurance company needs to pay the gratuity.