7th Pay Commission: How much gratuity one will get on salaries of Rs 20,000, Rs 30,000 and Rs 50,000; see calculation

Gratuity Calculator: When you are loyal to a company and work for a long time in it, what do you expect- a reward in any form. In a volatile job world where employees have abundant job options and many of them change their jobs at the drop of a hat, loyalty is rare. In such a scenario, when an employee stick to the job for at least five years, the employer rewards them in the form of gratuity. One needs to complete five years of job to be entitled to gratuity. A four-year-11-month job won't make you eligible for it. However, if is your last year of employment, a job for more than six months will be considered a full year. E.g., if one has worked for six years and eight months, their duration of employment will be considered to be seven years.

On the other hand, according to the Gratuity Act 1972, if an employee dies due to an accident or becomes disabled and is unable to work again, the rule of working for 5 years for gratuity payment does not apply to them.

In such a situation, the entire amount of gratuity is paid to their nominee or dependent. 

It is also necessary to know that although one becomes eligible for gratuity after five years of job, they get it at the time of leaving the job.

Is gratuity applicable to private sector employees as well?

Government (Centre and state) employees as well private sector employees are eligible for gratuity.

How will you know if your company provides gratuity?

According to the Gratuity Payment Act 1972, any company, factory, or institution, where 10 or more employees have worked on any one day in the last 12 months comes under the Gratuity Payment Act.

Once a company comes under the purview of the Act, it remains under it even if the number of employees is less than 10. 

Gratuity Calculator: How is gratuity calculated?

The formula to calculate gratuity is= (Last drawn salary) X (Number of years in employment) X (15/26)

Here, the last drawn salary means the average of your salary, which includes the basic salary and dearness allowance.

Since a month has four Sundays, 26 days are counted in gratuity calculation, and it is also calculated on the basis of 15 days.

Gratuity Calculator: What will be the gratuity at Rs 20,000, 30,000 and 50,000 salaries?

If your last drawn salary is Rs 20,000 and the employment period is 10 years

Your gratuity amount will be= Rs 20,000X10X15/26= Rs 1,15,385

If your last drawn salary is Rs 30,000 and the employment period is 10 years

Your gratuity amount will be= Rs 30,000X10X15/26= Rs 1,73,077

If your last drawn salary is Rs 50,000 and the employment period is 10 years

Your gratuity amount will be= Rs 50,000X10X15/26= Rs 2,88,462