An employee joined a shop (under the Delhi Shop Act) on 01 May 1999. The total number of employees was 6; then the number increased to 10 on 01 Jan 2006. His present salary structure is Basic - 33,000, HRA - 18,000, CCA - 7,000, Conv - 2,800 (Total 60,800/-). How much would be his gratuity eligibility if he leaves the shop on 31st May 2014? Thanking you for expert advice.
From India, Delhi
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From India, Delhi
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Date of leaving :- 31/05/2014 date of joining:- 01/05/1999 working period:- 15 years and 30 days. Gratuity:- basic+da*15/26*no. Of years services 33000*15/26*15= 285570 gratuity amount 285570 rs.
From India, Faridabad
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121From India, Faridabad
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The period when there were below 10 employees is applicable for the gratuity?
From India, Delhi
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From India, Delhi
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In reference to your query, I wish to clarify that it does not matter when the Payment of Gratuity Act, 1972, was made applicable to the establishment. The important factor is that on the day you plan to relinquish your post/service, the Act is applicable, and the establishment is covered under the Act.
Relevant Sections for Gratuity Eligibility
(i) An employee joined a shop (under the Delhi Shop Act) on 01 May 1999. The total number of employees was 6, then the number increased to 10 on 01 Jan 2006. His present salary structure is Basic-33000, HRA - 18000, CCA - 7000, Conv - 2800 (Total 60800/-). How much would his gratuity eligibility be if he leaves the shop on 31st May 2014?
Formula Used for Gratuity Calculation in India
Gratuity Calculation = [(Basic Pay + D.A) x 15 days x No. of years of service] / 26
Where, D.A = Dearness Allowance.
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From India, Mumbai
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Relevant Sections for Gratuity Eligibility
(i) An employee joined a shop (under the Delhi Shop Act) on 01 May 1999. The total number of employees was 6, then the number increased to 10 on 01 Jan 2006. His present salary structure is Basic-33000, HRA - 18000, CCA - 7000, Conv - 2800 (Total 60800/-). How much would his gratuity eligibility be if he leaves the shop on 31st May 2014?
Formula Used for Gratuity Calculation in India
Gratuity Calculation = [(Basic Pay + D.A) x 15 days x No. of years of service] / 26
Where, D.A = Dearness Allowance.
Regards
From India, Mumbai
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In reference to your query, I wish to clarify that it does not matter when the Payment of Gratuity Act, 1972, was made applicable to your establishment. Rather, it is more important that the Act is applicable on the day you decide to leave. In your case, the following are the sections or rules which have applicability:
Section 2(s)
"Wages" means all emoluments earned by an employee while on duty or on leave in accordance with the terms and conditions of his employment, which are paid or payable to him in cash. This includes dearness allowance but does not include any bonus, commission, house rent allowance, overtime wages, or any other allowance.
Section 3(b)
The Act is applicable to every shop or establishment within the meaning of any law for the time being in force in relation to shops and establishments in a State, in which ten or more persons are employed, or were employed, on any day of the preceding twelve months.
Section 4(1)(b)
Gratuity shall be payable to an employee on the termination of his employment after he has rendered continuous service for not less than five years, either on his retirement or resignation.
Section 4(2)
For every completed year of service or part thereof in excess of six months, the employer shall pay gratuity to an employee at the rate of fifteen days' wages based on the rate of wages last drawn by the employee concerned.
The formula for the calculation of gratuity shall be as follows:
[Basic Pay + D.A] x 15 days x No. of years of service / 26
Where D.A = Dearness Allowance.
Since you joined your establishment on 01 May 1999 and have decided to leave on 31st May 2014, you have completed 15 years and one month. Thus, you shall be entitled to Rs 285,577 by applying the formula of [33,000 + 0] x 15 days x 15 years / 26.
Regards,
BS Kalsi
Member since Aug 2011
From India, Mumbai
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Section 2(s)
"Wages" means all emoluments earned by an employee while on duty or on leave in accordance with the terms and conditions of his employment, which are paid or payable to him in cash. This includes dearness allowance but does not include any bonus, commission, house rent allowance, overtime wages, or any other allowance.
Section 3(b)
The Act is applicable to every shop or establishment within the meaning of any law for the time being in force in relation to shops and establishments in a State, in which ten or more persons are employed, or were employed, on any day of the preceding twelve months.
Section 4(1)(b)
Gratuity shall be payable to an employee on the termination of his employment after he has rendered continuous service for not less than five years, either on his retirement or resignation.
Section 4(2)
For every completed year of service or part thereof in excess of six months, the employer shall pay gratuity to an employee at the rate of fifteen days' wages based on the rate of wages last drawn by the employee concerned.
The formula for the calculation of gratuity shall be as follows:
[Basic Pay + D.A] x 15 days x No. of years of service / 26
Where D.A = Dearness Allowance.
Since you joined your establishment on 01 May 1999 and have decided to leave on 31st May 2014, you have completed 15 years and one month. Thus, you shall be entitled to Rs 285,577 by applying the formula of [33,000 + 0] x 15 days x 15 years / 26.
Regards,
BS Kalsi
Member since Aug 2011
From India, Mumbai
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Gratuity Calculation Resource
Please find the link below. I hope it will be useful for calculating the gratuity.
Gratuity Calculation India
Regards,
Muthu
Senior HR Executive
From India, Chennai
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Please find the link below. I hope it will be useful for calculating the gratuity.
Gratuity Calculation India
Regards,
Muthu
Senior HR Executive
From India, Chennai
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Payment of Gratuity Act, 1972 & The Rules.ppt
THE PAYMENT OF GRATUITY ACT 1972.doc