Gratuity Calculation: What is Gratuity? How is Gratuity Calculated? Those starting a new job do not know much about it. The salaried (Service Class) gets gratuity on the job of 5 years.
Gratuity Calculation: What is Gratuity? How is Gratuity Calculated? Those starting a new job do not know much about it. The salaried (Service Class) gets gratuity on the job of 5 years. Under the Payment of Gratuity Act, 1972, employees of a company having more than 10 employees are entitled to gratuity. However, this may change. It may mean that instead of 5 years, the benefit of gratuity should be given on 1 year. If this happens, then it will benefit crores of employees of private and government sector. Work on this is going on inside the government.
Why do I get Gratuity?
Under the Payment of Gratuity Act, 1972, the employer has to pay gratuity to every employee in the company where there are more than 10 employees. Let us tell you that the government has also increased the amount of tax free gratuity from Rs 10 lakh to Rs 20 lakh.
How much gratuity on 10 year job
If your last drawn salary is 25 thousand rupees and the length of service is 10 years, then your total gratuity will be ₹ 1,44,231.
What time will be less
There may be a change in the method of calculating Gratuity. But there are provisions for gratuity to be received before 5 years.
On death of employee
If the employee dies before 5 years while in service, then in such case the family of the employee will get gratuity.
If a female or male employee becomes physically handicapped due to any accident or disease while doing the job, then gratuity is given to the employee as per rules on behalf of the employer.
Jobs of more than 4.6 years
If the employee in a company completes more than four and a half years i.e. 4 years 7 months, then in this situation the last year is considered as the full year of the employee. That is, if the employee works for more than 6 months in the last year, then he is given gratuity from the employer.
No Gratuity on Contract
Employees who work on contract do not get the benefit of gratuity. However, some companies also give this benefit to contract employees other than this.
Last Drawn Salary x 15 x Length of Service / 26=Gratuity amount