Gratuity Formula is Last Basic Salary + DA earned / 26 * 15 * No of years worked The conditions are 1) Minimum of 5 years of service 2) The above formula is for monthly salary employees
From India, New Delhi
From India, New Delhi
Also please note that the gratuity amount for CTC is calculated as :-
15/26*1 month basic salary = Annual gratuity to be deducted.
Whenever any employee is leaving the company after 5 yrs. of service or completed 5 yrs. in the company he is eligible for gratuity. ANy amount greater than Rs. 360000 is taxable.
From India, Delhi
15/26*1 month basic salary = Annual gratuity to be deducted.
Whenever any employee is leaving the company after 5 yrs. of service or completed 5 yrs. in the company he is eligible for gratuity. ANy amount greater than Rs. 360000 is taxable.
From India, Delhi
Broadly, the amount of Gratuity payable is 15 days wages for every year of service rendered.In terms of formula, as already mentioned by our friends, it is :
(Basic Pay+D.A)/26 * 15* length of service
In PSUs as well as in govt. service there is a ceiling on Gratuity payble which is 3.5 lacs. And the minimum eligibility is 5 years of service.
Ashok
From India, Bhubaneswar
3(Basic Pay+D.A)/26 * 15* length of service
In PSUs as well as in govt. service there is a ceiling on Gratuity payble which is 3.5 lacs. And the minimum eligibility is 5 years of service.
Ashok
From India, Bhubaneswar
Grautity is payable to eligible candidates only(There must be five years of continuous services). The amount paid is fifteen days salary(last paid) for every completed years of service. IF the period is six or more month the nest year is taken for consideration. for ex. an employee whose wage is Rs. 3000 per month and he has worked for 10 years and 7month (of course haivng 5 years of continuous service) his gratuity amount will be
= (15/26)3000*11
I hope this is clear to you.
N.K.Tiwari
From United States, Cambridge
= (15/26)3000*11
I hope this is clear to you.
N.K.Tiwari
From United States, Cambridge
dear Ashok , As mentioned by you that 15 days of wages for every completed year is paid, can you tell me whether this 15 days of basic or gross please. Raj.
Dear Raj,
The term "wages" has been defined under The Payment of Wages Act, 1972 in section 2(s) as all emoluments which are earned by an employee while on duty or on leave in accordance with the terms and conditions of his employment and which are payable to him in cash and includes dearness allowance but does not include any bonus, commission, HRA, overtime wages and any other allowance.
From the above definition laid down in the Act, you will find that Gratuity is not payble on Gross Pay because the wages under the Act has specifically excluded allowances which are an integral part of gross Pay.
Ashok
From India, Bhubaneswar
The term "wages" has been defined under The Payment of Wages Act, 1972 in section 2(s) as all emoluments which are earned by an employee while on duty or on leave in accordance with the terms and conditions of his employment and which are payable to him in cash and includes dearness allowance but does not include any bonus, commission, HRA, overtime wages and any other allowance.
From the above definition laid down in the Act, you will find that Gratuity is not payble on Gross Pay because the wages under the Act has specifically excluded allowances which are an integral part of gross Pay.
Ashok
From India, Bhubaneswar
Dear Raj,
To add to the long story and keeping focussed on your specific questions :
1) whether Gratuity is payable on basic : the reply is basic plus D.A.
2) whether Gratuity is payable on gross: the answer is again no for the reasons stated by me earlier.
I also find several informative postings on various aspects of this topic in cite HR. You may also go through and benefit from the same.
Ashok
From India, Bhubaneswar
To add to the long story and keeping focussed on your specific questions :
1) whether Gratuity is payable on basic : the reply is basic plus D.A.
2) whether Gratuity is payable on gross: the answer is again no for the reasons stated by me earlier.
I also find several informative postings on various aspects of this topic in cite HR. You may also go through and benefit from the same.
Ashok
From India, Bhubaneswar
Formula for Gratuity payment is
Wage last drawn / 26 * 15 * No. of years of service completed.
Note:
1. Eligibility is completion of 5 years of service.
2. If a person worked for 5 years and 7 months (ie. half year or more) it should be taken as 6 years.
3. Gratuity payable to an employee shall not exceed Rs. 3,50,000/-
Helen
Wage last drawn / 26 * 15 * No. of years of service completed.
Note:
1. Eligibility is completion of 5 years of service.
2. If a person worked for 5 years and 7 months (ie. half year or more) it should be taken as 6 years.
3. Gratuity payable to an employee shall not exceed Rs. 3,50,000/-
Helen
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FORM-F-NOMINATI ON OF GRATUITY.pdf
Gratuity Form I.doc