Gratuity Calculation: What will be your gratuity for Rs 35,000, Rs 55,000, and Rs 75,000 last-drawn salary after 11 years and 8 months of service?
Have you received your gratuity amount yet? If not, let's calculate it using a simple formula. We will also cover the eligibility criteria, when you can expect to receive the amount, and an estimate of the sum you are eligible for. Take a look!
Gratuity is a lump sum paid to an employee by their employer to thank them for long-term service. It is given when an employee retires or resigns after completing five years of continuous service. It's a form of gratitude for their dedicated work. Simply put, gratuity is a monetary token of appreciation. The other reasons when an employee can receive a gratuity are given below. Also, find out what your gratuity amount will be for Rs 35,000, Rs 55,000, and Rs 75,000 last-drawn salary after 11 years and 8 months of service.
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When can you receive gratuity?
5 years of continuous service are required to be eligible for gratuity as per the Payment of Gratuity Act, 1972.
Gratuity eligibility scenarios
Gratuity is payable in the following situations:
1. Retirement: Upon retirement from service
2. Resignation: After completing 5 years of continuous service
3. Death or Disability: In the event of death or disability due to accident or illness while in service
4. Superannuation: Upon reaching superannuation age (a type of retirement benefit)
How are service years counted for gratuity?
To get gratuity, you need 5 years of continuous service. Other than that, any service period of 6 months or more is counted as a full year.
What determines gratuity amount?
The number of years and the last-drawn basic salary of an employee are used to calculate the gratuity amount.
Can company opt out of Payment of Gratuity Act?
If a company falls under the Payment of Gratuity Act of 1972, it cannot count itself out.
Is it compulsory to complete five years of continuous service to apply for gratuity?
Yes, it is compulsory to complete five years of continuous service to apply for gratuity.
Formula to calculate gratuity
(Last Drawn Salary x Number of Years of Service) X 15/26
Here, 15 refers to 15 days’ wages per year, and 26 refers to 30 days in a month, excluding Sundays.
What will be your gratuity on Rs 35,000 basic salary for 11.8 years of service?
Let’s calculate gratuity for an employee with a basic salary of Rs 60,000, 11 years, and 8 months of service (rounded to 12 years).
Gratuity = (35,000 × 12 × 15) ÷ 26
Gratuity = Rs 2,42,307
What will be your gratuity on Rs 55,000 basic salary for 11.8 years of service?
Let’s calculate gratuity for an employee with a basic salary of Rs 80,000, 11 years, and 8 months of service (rounded to 12 years).
Gratuity = (55,000 × 12 × 15) ÷ 26
Gratuity = Rs 3,80,769
What will be your gratuity on Rs 75,000 basic salary for 11.8 years of service?
Let’s calculate gratuity for an employee with a basic salary of Rs 90,000, 11 years, and 8 months of service (rounded to 12 years).
Gratuity = (75,000 × 12 × 15) ÷ 26
Gratuity = Rs 5,19,230