Any body can explain gratuity calculation with one illustration?
From India, Erode
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1From India, Erode
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Gratuity Calculation Example
Gratuity = Basic Salary * 15/26 * number of years served for the organization (greater than or equal to 5 years).
Example - 1) One employee worked 6 years for an organization. His gross salary is Rs. 22,000, and the basic salary is Rs. 13,000. Then his gratuity amount is as follows:
Gratuity = 13,000 * 15/26 * 6
Gratuity = 45,000/-
If there are any mistakes, please update me.
Regards,
Mahmood.
From India, Vijayawada
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Gratuity = Basic Salary * 15/26 * number of years served for the organization (greater than or equal to 5 years).
Example - 1) One employee worked 6 years for an organization. His gross salary is Rs. 22,000, and the basic salary is Rs. 13,000. Then his gratuity amount is as follows:
Gratuity = 13,000 * 15/26 * 6
Gratuity = 45,000/-
If there are any mistakes, please update me.
Regards,
Mahmood.
From India, Vijayawada
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Calculation of Gratuity
Calculation: W x Y x 15/26
where,
- W = Last wage drawn, i.e., basic + DA (monthly)
- Y = Number of completed years of continuous service (six months or less to be ignored and more than six months to be counted as a full year).
- 15 = 15 days' salary
- 26 = Number of working days in a month.
Thanks & Regards,
Snigdha
From India, Mumbai
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Calculation: W x Y x 15/26
where,
- W = Last wage drawn, i.e., basic + DA (monthly)
- Y = Number of completed years of continuous service (six months or less to be ignored and more than six months to be counted as a full year).
- 15 = 15 days' salary
- 26 = Number of working days in a month.
Thanks & Regards,
Snigdha
From India, Mumbai
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Gratuity will be calculated on Basic + DA x 15 days Salary (Half Month Salary) / no. of working days in a month (i.e., 26 days) x no. of years (number of years of service rendered in that organization). In some organizations, they won't show DA separately. It will be included in the Basic salary, so we can consider only the Basic Salary.
Make sure that gratuity will be eligible for those who have completed 5 years of service or more, not less than that. However, in a few organizations, they may consider and provide gratuity when an individual completes 4 years and 8 months of service. This is dependent on the organization; not all organizations follow this practice.
Thanks and Regards,
Nirmala
From India, Bangalore
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Make sure that gratuity will be eligible for those who have completed 5 years of service or more, not less than that. However, in a few organizations, they may consider and provide gratuity when an individual completes 4 years and 8 months of service. This is dependent on the organization; not all organizations follow this practice.
Thanks and Regards,
Nirmala
From India, Bangalore
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I also want to know if an employee passed away before completing 5 years of service in that organization, does gratuity still stand valid for that employee? Secondly, if the employee passed away after completing 5 years, will the calculation remain the same or will any bonus factor come into play?
Regards,
Pampa
From India, Calcutta
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Regards,
Pampa
From India, Calcutta
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Gratuity calculation = Basicx 15 days x years/26 days Suppose Basic is 10000 & he completed 7 years so we give him = 10000x15x7/26= 40385.00 Regards, Rajeev Kumar
From India, Bangalore
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From India, Bangalore
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Update on Gratuity Eligibility
An employee will be entitled to gratuity benefits if he/she has completed a minimum of 4 years, 10 months, and 18 days of continuous service in a company. This was established by the Madras High Court in the case of Mettur Beardsell Ltd Vs. Regional Labour Commissioner (Appellate Authority under the Gratuity Act). Kindly correct me if I am wrong.
From India, Bangalore
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An employee will be entitled to gratuity benefits if he/she has completed a minimum of 4 years, 10 months, and 18 days of continuous service in a company. This was established by the Madras High Court in the case of Mettur Beardsell Ltd Vs. Regional Labour Commissioner (Appellate Authority under the Gratuity Act). Kindly correct me if I am wrong.
From India, Bangalore
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Dear All, Gratuity will be eligible those who completed 5 years of service or more, but if a employee is expire or permanent disablement then what is the minimum year of service is compulsory?
From India, Mumbai
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From India, Mumbai
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Eligibility for Gratuity
If an employee was on contract, in any case, he will not be eligible for gratuity. This gratuity is applicable only if he is a permanent employee. In the case of Meena, his period of service is taken as 4 years and not 5 years.
From India, Bangalore
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If an employee was on contract, in any case, he will not be eligible for gratuity. This gratuity is applicable only if he is a permanent employee. In the case of Meena, his period of service is taken as 4 years and not 5 years.
From India, Bangalore
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What I referred is under normal circumstances. In case of death or retrenchment due to closure of the establishment, an employee will be entitled to Gratuity irrespective of the period of service.
From India, Bangalore
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From India, Bangalore
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What happens in case the person is on leave for 6 months. will he be eligible for gratuity
From India, Mumbai
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From India, Mumbai
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Yeah, the aforesaid calculations are correct. Five years of continuous service in an organization is mandatory to be eligible for Gratuity. The calculation is as follows: Last drawn Basic + DA * years of service * 15/26.
Regards,
Kannan R
From India, Bangalore
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Regards,
Kannan R
From India, Bangalore
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It's good to see that lots of users are giving their ideas on the aforementioned problem. I really appreciate that, but no one has reached a solution for the particular query of what happens if an employee expires after 5 years of consecutive service in the organization.
Solution for Gratuity Payment in Case of Employee's Death
Here is the solution: the nominee can collect the gratuity payment as mentioned in Form F. To change the nomination, the employee must fill out Form H (Modification of Nomination) during service. If the employee nominee needs to claim the gratuity payment in case of their death, the nominee must fill out Form J. For claiming the gratuity payment by a legal heir, Form K will be used.
For more information regarding the gratuity rules and forms, I am enclosing the Gratuity Act.
Hopefully, you will appreciate it.
Thanks
From India, Chandigarh
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Solution for Gratuity Payment in Case of Employee's Death
Here is the solution: the nominee can collect the gratuity payment as mentioned in Form F. To change the nomination, the employee must fill out Form H (Modification of Nomination) during service. If the employee nominee needs to claim the gratuity payment in case of their death, the nominee must fill out Form J. For claiming the gratuity payment by a legal heir, Form K will be used.
For more information regarding the gratuity rules and forms, I am enclosing the Gratuity Act.
Hopefully, you will appreciate it.
Thanks
From India, Chandigarh
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for gratuity calculation =current basic*15/26*no. of year for examaple if the currrent basic on the time of left of the service is 12000*15/26*service periods is minimun 5 year=34615
From India, Delhi
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From India, Delhi
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Gratuity will be paid only if the employee has worked for more than 5 years. Only in the case of death, an employee who has served more than 6 months will be eligible for gratuity payment. If the deceased employee served for more than 180 days in the year, they will be eligible for 1 year of gratuity.
Gratuity will be calculated as follows: Last drawn (Basic + DA) / 26 * 15 * Number of years. For example, if Basic + DA = 10,000 and the number of years is 10, the calculation would be 10,000 / 26 * 15 * 10 = 57,692/-. If the same employee works for 10 years & 7 months, the gratuity will be calculated for 11 years, and if less than 10.6 years, it will be considered as 10 years only. The gratuity amount should not exceed more than 10 Lakhs.
From India, Mumbai
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Gratuity will be calculated as follows: Last drawn (Basic + DA) / 26 * 15 * Number of years. For example, if Basic + DA = 10,000 and the number of years is 10, the calculation would be 10,000 / 26 * 15 * 10 = 57,692/-. If the same employee works for 10 years & 7 months, the gratuity will be calculated for 11 years, and if less than 10.6 years, it will be considered as 10 years only. The gratuity amount should not exceed more than 10 Lakhs.
From India, Mumbai
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hi, if any person works 7months and after that expired. as per aforesaid discussion he is eligible to get 1yr gratuity. his basic salary was 8500. how can i calculate?
From India, Calicut
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From India, Calicut
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Dear Vijai, Calculate as below. Gratuity =8500/26*15*1(since more than 180 days it is calculated as 1 yr) = 4904/-
From India, Mumbai
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From India, Mumbai
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what ever the case may be if he has served more than 180 days in the current year is is calculated for 1 year only.
From India, Mumbai
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From India, Mumbai
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Normally, gratuity calculation occurs after the completion of 5 years, and the calculation depends on three conditions:
1. Last drawn salary (average of 10 months) - where salary means Basic + DA.
2. 15/26 of the basic salary multiplied by completed years.
3. Payment of Gratuity Act 1972 Rs 3.5 lakhs.
Whichever amount is least is exempted under the Income Tax Act. Every company must follow the same rules. A provision is created for the employee from the date of joining onward.
Required Fields for Gratuity Calculation
- Employee ID
- Employee Name
- Basic
- DA
- Date of Birth
- Date of Joining
Thanks,
Suresh
From India, Hyderabad
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1. Last drawn salary (average of 10 months) - where salary means Basic + DA.
2. 15/26 of the basic salary multiplied by completed years.
3. Payment of Gratuity Act 1972 Rs 3.5 lakhs.
Whichever amount is least is exempted under the Income Tax Act. Every company must follow the same rules. A provision is created for the employee from the date of joining onward.
Required Fields for Gratuity Calculation
- Employee ID
- Employee Name
- Basic
- DA
- Date of Birth
- Date of Joining
Thanks,
Suresh
From India, Hyderabad
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