Check Out Detailed Information About Gratuity How It Is Calculated .
Delhi: The government is considering reducing the gratuity payment period for employees from 5 years to 1 to 3 years.
Gratuity is the amount paid to an employee on behalf of the organization or employer. But for this he needs to work for at least five years. This amount is usually paid when an employee leaves the job, is fired or retires.
Gratuity Payment Act 1972:
The Gratuity Payment Act was enacted in 1972 to protect the interests of employees
Gratuity is received 5 years before the death of the employee:
If an employee dies for any reason or loses his job due to illness or accident, he or his nominee gets the amount of gratuity. As per the rules of Gratuity Payment Act 1972, the amount of gratuity can be up to a maximum of Rs. 20 lakhs.
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Which organization comes under this Act?
Any organization where 10 or more employees work any one day during the last 12 months is covered under the Gratuity Payment Act.
Once it comes under the Act, even if the number of employees in the company is less than 10, it remains for this Act forever.
How is gratuity calculated?
Category 1- Employees who fall under the Gratuity Payment Act 1972.
Category 2- Employees who do not fall under the Gratuity Payment Act 1972.
How is gratuity calculated?
Formula for calculating gratuity for category 1:
(15 x previous salary x working period) / 26
Last Salary = Basic Salary + Inflation Allowance + Commission on Sales (if received). In this formula the employee is paid an average of 15 days, counting 26 working days of the month.
Job Duration = In the last year of the job if he works above 6 months it will be considered as full year. For example, after 5 years and 7 months of service it will be considered as full 6 years.
Example- Mr. Sun leaves the job after working for 5 years and 8 months in A Limited. During the last month of his retirement, his basic salary was Rs. 13000 per month.
According to the formula in this case, the amount of his gratuity will be as follows.
How much gratuity will be given: 13,000x6x15 / 26 = Rs. 45,000.
Formula for calculating gratuity for category 2:
(15 x previous salary x working period) / 30
Last Salary = Basic Salary + Inflation Allowance + Commission on Sales (if any).
In this formula, an employee is paid an average of 15 working days, counting 30 working days a month.
Duration of employment = No less than 12 months is added to the last year of employment for such employees. For example, if an employee works for 5 years and 7 months, it will only count as 5 years.
Example- Mr. Moon quits his job after working in B Limited Company for 5 years and 8 months. His basic salary during the last month of his retirement was Rs 13,000 per month. This company does not fall under the purview of the Act.
In such a situation, according to the formula, Mr. The amount of Moon's gratuity will be as follows.
How much gratuity will be given: 13000x5x15 / 30 = 32,500 rupees
Calculation in case of death of the employee.
In case of death of the employee, gratuity is paid depending on the duration of the job, up to a maximum of Rs 20 lakh.
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It is important to understand the gratuity and how it is calculated. Under the Act, employees are divided into 2 categories.
- Eligibility for Gratuity requires 5 years of employment in one place.
- The Gratuity Payment Act was enacted in 1972 to protect the interests of employees.
Delhi: The government is considering reducing the gratuity payment period for employees from 5 years to 1 to 3 years.
Gratuity is the amount paid to an employee on behalf of the organization or employer. But for this he needs to work for at least five years. This amount is usually paid when an employee leaves the job, is fired or retires.
Gratuity Payment Act 1972:
The Gratuity Payment Act was enacted in 1972 to protect the interests of employees
Gratuity is received 5 years before the death of the employee:
If an employee dies for any reason or loses his job due to illness or accident, he or his nominee gets the amount of gratuity. As per the rules of Gratuity Payment Act 1972, the amount of gratuity can be up to a maximum of Rs. 20 lakhs.
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Which organization comes under this Act?
Any organization where 10 or more employees work any one day during the last 12 months is covered under the Gratuity Payment Act.
Once it comes under the Act, even if the number of employees in the company is less than 10, it remains for this Act forever.
How is gratuity calculated?
Category 1- Employees who fall under the Gratuity Payment Act 1972.
Category 2- Employees who do not fall under the Gratuity Payment Act 1972.
How is gratuity calculated?
Formula for calculating gratuity for category 1:
(15 x previous salary x working period) / 26
Last Salary = Basic Salary + Inflation Allowance + Commission on Sales (if received). In this formula the employee is paid an average of 15 days, counting 26 working days of the month.
Job Duration = In the last year of the job if he works above 6 months it will be considered as full year. For example, after 5 years and 7 months of service it will be considered as full 6 years.
Example- Mr. Sun leaves the job after working for 5 years and 8 months in A Limited. During the last month of his retirement, his basic salary was Rs. 13000 per month.
According to the formula in this case, the amount of his gratuity will be as follows.
How much gratuity will be given: 13,000x6x15 / 26 = Rs. 45,000.
Formula for calculating gratuity for category 2:
(15 x previous salary x working period) / 30
Last Salary = Basic Salary + Inflation Allowance + Commission on Sales (if any).
In this formula, an employee is paid an average of 15 working days, counting 30 working days a month.
Duration of employment = No less than 12 months is added to the last year of employment for such employees. For example, if an employee works for 5 years and 7 months, it will only count as 5 years.
Example- Mr. Moon quits his job after working in B Limited Company for 5 years and 8 months. His basic salary during the last month of his retirement was Rs 13,000 per month. This company does not fall under the purview of the Act.
In such a situation, according to the formula, Mr. The amount of Moon's gratuity will be as follows.
How much gratuity will be given: 13000x5x15 / 30 = 32,500 rupees
Calculation in case of death of the employee.
In case of death of the employee, gratuity is paid depending on the duration of the job, up to a maximum of Rs 20 lakh.
Youtube channel
https://www.youtube.com/channel/UCFO3qCG8HgHb7xn5W0jcdew
Fastest job alert @ Telegram
https://telegram.me/govjobguide
For teachers and professors
https://t.me/teachersprofessorjobs
FB
https://www.facebook.com/Govjobguide-112570290271531/
https://www.linkedin.com/in/govjobguide-com-077208193
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