Gratuity Calculation: What will be your gratuity for Rs 38,000, Rs 49,000, and Rs 65,000 last-drawn salary after 6 years and 3 months of service?
The number of years and the last-drawn basic salary of an employee are used to calculate the gratuity amount. To get gratuity, you need 5 years of continuous service. Any service period of 6 months or more is counted as a full year.
Gratuity is a one-time payment employers give to employees as a thank you for long service. Companies with 10+ employees must pay gratuity after 5 years of continuous service, following the Payment of Gratuity Act, 1972. If you work 6+ months in a year, it counts as a full year. Plus, if a company falls under the Payment of Gratuity Act of 1972, it cannot count itself out. On that account, let’s find out what your gratuity amount will be for Rs 38,000, Rs 49,000, and Rs 65,000 last-drawn salary after 6 years and 3 months of service.
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What is gratuity?
Gratuity is a one-time payment employers give to employees who have worked with them for at least 5 years, showing appreciation for their long-term service and loyalty.
How many years of service are required to get gratuity?
Employees are eligible for gratuity after completing 5 years of continuous service with the same employer, as per the Payment of Gratuity Act, 1972.
Who is eligible for gratuity payment?
To qualify for gratuity, employees need to:
1. Complete 5 years of continuous service
2. Work in an organization covered under the Payment of Gratuity Act, 1972.
What qualifies you for gratuity payment?
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 calculated for gratuity eligibility?
To get gratuity, you need 5 years of continuous service. 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.
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 a Rs 38,000 basic salary for 6.3 years of service?
Let’s calculate gratuity for an employee with a basic salary of Rs 38,000, 6 years, and 3 months of service (rounded to 6 years).
Gratuity = (38,000 × 6 × 15) ÷ 26
Gratuity = Rs 1,31,538
What will be your gratuity on a Rs 49,000 basic salary for 6.3 years of service?
Let’s calculate gratuity for an employee with a basic salary of Rs 49,000, 6 years, and 3 months of service (rounded to 6 years).
Gratuity = (49,000 × 6 × 15) ÷ 26
Gratuity = Rs 1,69,615
What will be your gratuity on a Rs 65,000 basic salary for 6.3 years of service?
Let’s calculate gratuity for an employee with a basic salary of Rs 65,000, 6 years, and 3 months of service (rounded to 7 years).
Gratuity = (65,000 × 6 × 15) ÷ 26
Gratuity = Rs 2,25,000