Dear Friends,
First of all, I would like to wish a "VERY HAPPY WOMEN'S DAY".
1. My friend is working in a company where gratuity is included in the CTC (4.81% of Basic), and the company deposits it to the authority on time as well.
2. My friend has completed 4 years and 204 days (4.55 years) and wants to leave the company. Please suggest whether she is entitled to receive the gratuity from the current company or not.
Regards,
XYZ
From India, Gurgaon
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First of all, I would like to wish a "VERY HAPPY WOMEN'S DAY".
1. My friend is working in a company where gratuity is included in the CTC (4.81% of Basic), and the company deposits it to the authority on time as well.
2. My friend has completed 4 years and 204 days (4.55 years) and wants to leave the company. Please suggest whether she is entitled to receive the gratuity from the current company or not.
Regards,
XYZ
From India, Gurgaon
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Gratuity Eligibility and Payment
Five years of completion is necessary to become eligible for gratuity. You stated that the company is depositing the gratuity amount to the authority; however, there is no authority formed by the government to deposit the gratuity amount. The employer is liable to pay gratuity to its employees, which is a legal requirement.
Applicability
Any employer of the above-noted establishments where ten or more persons are employed or were employed on any day of the preceding twelve months is liable to pay gratuity to its employees. Once the Act becomes applicable, it continues even if the number of employees falls below ten.
Entitlement
Gratuity is payable to an employee (or nominee, in case of the death of the employee) who has rendered continuous service of five years or more upon termination of employment, superannuation, retirement, or resignation. Completion of continuous service of five years is not necessary when the termination of employment is due to death or disablement.
Calculation
W x Y x 15/26 where:
- W = Last Wage drawn, i.e., basic + DA
- 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.
Regards,
Mohammad Sajid Ansari
[Phone Number Removed For Privacy Reasons]
From India, Gurgaon
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5Five years of completion is necessary to become eligible for gratuity. You stated that the company is depositing the gratuity amount to the authority; however, there is no authority formed by the government to deposit the gratuity amount. The employer is liable to pay gratuity to its employees, which is a legal requirement.
Applicability
Any employer of the above-noted establishments where ten or more persons are employed or were employed on any day of the preceding twelve months is liable to pay gratuity to its employees. Once the Act becomes applicable, it continues even if the number of employees falls below ten.
Entitlement
Gratuity is payable to an employee (or nominee, in case of the death of the employee) who has rendered continuous service of five years or more upon termination of employment, superannuation, retirement, or resignation. Completion of continuous service of five years is not necessary when the termination of employment is due to death or disablement.
Calculation
W x Y x 15/26 where:
- W = Last Wage drawn, i.e., basic + DA
- 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.
Regards,
Mohammad Sajid Ansari
[Phone Number Removed For Privacy Reasons]
From India, Gurgaon
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