What is Gratuity Rules: Know what are the rules of gratuity, how will the company benefit from it

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What is Gratuity Rules: Employed people are always in a state of inebriation regarding gratuity. In such a situation, if you are also doing a job, then questions will be arising in your mind that what is gratuity, when does the company give its benefit. How the gratuity is calculated. In this article, answers to these questions have been brought. An employee gets the benefit of gratuity only when he has completed five years while working in the company concerned.




What is Gratuity Rules: Employed people are always in a state of inebriation regarding gratuity. In such a situation, if you are also doing a job, then questions will be arising in your mind that what is gratuity, when does the company give its benefit. How the gratuity is calculated. Explain that gratuity is the part of salary which is received by the employer in return for your years of services. However, any employee gets the benefit of gratuity only when he has completed five years while working in the company concerned.




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Explain that if there is a company with more than 10 employees, then it has to pay gratuity to its employees. Gratuity is the right of the employee. According to Section 4 (1) of the Payment of Gratuity Act 1972, any employee after completing 5 years of his job in a company is entitled to gratuity as per the prescribed standards. In such a situation, people who change jobs quickly will never be able to take advantage of gratuity.




However, if an employee has completed 5 years of job in the same company, then even if he changes the job the next day, he will still have the right to get the full amount of gratuity from his previous company. Now such people who have just started working soon, the question will be in their mind that how is the calculation of gratuity done.




This is how the gratuity calculates

An employee has to multiply the first month’s basic salary and dearness allowance by the first 15 in lieu of every year completed in his service after working for 5 years. The amount that comes after this is divided by 26. The amount received after being given away is called gratuity.

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