which components includes while calculating gratuity ? what to take care of while Calculating Gratuity ?
From India, Ahmedabad
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From India, Ahmedabad
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Gratuity Qualifying Salary
Under normal circumstances, only the basic salary and dearness allowance qualify for gratuity. However, if these components are set at a very low base with the intention to reduce gratuity and other terminal benefits, this can be challenged. In the current system of pay structuring, the gratuity qualifying salary is often disputable. For a better understanding, please follow the link.
http://madhu-t-k.blogspot.com/2024/04/gratuity-qualifying-salary-some.html
From India, Kannur
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4526Under normal circumstances, only the basic salary and dearness allowance qualify for gratuity. However, if these components are set at a very low base with the intention to reduce gratuity and other terminal benefits, this can be challenged. In the current system of pay structuring, the gratuity qualifying salary is often disputable. For a better understanding, please follow the link.
http://madhu-t-k.blogspot.com/2024/04/gratuity-qualifying-salary-some.html
From India, Kannur
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Gratuity Calculation Basis
Gratuity should be calculated on the basis of Basic & DA only. If the Basic & DA is less than the minimum wages of the employee, it should be on the basis of minimum wages.
Impact of Labor Codes
After the implementation of labor codes, this problem will be over for the new way to determine the Basic & DA.
Regards, S K Bandyopadhyay (WB, Howrah) CEO-USD HR Solutions [Phone Number Removed For Privacy-Reasons] [Email Removed For Privacy Reasons] www.usdhrs.in
From India, New Delhi
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Gratuity should be calculated on the basis of Basic & DA only. If the Basic & DA is less than the minimum wages of the employee, it should be on the basis of minimum wages.
Impact of Labor Codes
After the implementation of labor codes, this problem will be over for the new way to determine the Basic & DA.
Regards, S K Bandyopadhyay (WB, Howrah) CEO-USD HR Solutions [Phone Number Removed For Privacy-Reasons] [Email Removed For Privacy Reasons] www.usdhrs.in
From India, New Delhi
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True, but what constitutes basic wages is a matter of dispute. It is not really the basic wages that the employers decide. For the computation of gratuity, there is no such direction in the Act that it should be computed only on basic wages and dearness allowance. If the purpose was to make it calculated on basic wages and DA alone, the Act would have defined the term basic wages. However, the Act has defined wages, and that includes all emoluments and not simply basic wages. Yes, there are some exclusions like commission, overtime, etc., and these are payments that will become due only under certain conditions, the amount of which cannot be prefixed under a contract of employment.
From India, Kannur
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From India, Kannur
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Gratuity calculation.doc
LEAVE ENCASHMENT NOT INCLUDED IN WAGES FOR P. F. CALCULATION.pdf