Death Gratuity Calculator: Know your entitlements; check how to calculate it

Death Gratuity Calculator: What is Death gratuity and what are your entitlements under it? How can it be availed and what are the requirements to be met by the beneficiary? Know all the answers here.

In case of death or disablement, there is no minimum eligibility period. The gratuity amount depends upon the tenure of service and last drawn salary. As per the Gratuity Act, the gratuity is payable up to the date of death irrespective of whether he completed five years or not. However, where the employees are covered by any group gratuity insurance scheme, a case may arise for payment of gratuity till retirement depending upon the terms of insurance cover.

The gratuity amount depends upon the tenure of service and last drawn salary. It is calculated according to this formula: Last drawn salary (basic salary plus dearness allowance) X number of completed years of service X 15/26.

While companies are expected to give gratuity dues to employees in a fair and just manner, it is better to know what you are entitled to so that no clerical or administrative error leads you to get a lesser amount? Zee Business will teach you to calculate your Gratuity amount.

Death Gratuity Calculation 

Gratuity = n*b*15/26

Here, 'n' is the tenure of service completed in the company and 'b' is the last drawn basic salary + dearness allowance

To make it easy for you, we explain it to you through an example.

Imagine that you worked with XYZ company for a period of 10 years. Your last drawn basic salary along with dearness allowance was Rs 40000. The amount of gratuity = 10*40000*15/26 = Rs 230,769.23

Note that the time period of service is rounded-off for gratuity calculation. If the last few months in the last year of employment are more than 6 months, then it will be rounded to the next number. For eg. 10 years and 8 months will become 11 years. Up to five months the same year will be counted. For example, if the period of service is 10 years and 4 months, it will be treated as 10 years.

Gratuity is the money that is paid by an employer to his employee in return for his services. It is governed by the Payment of Gratuity Act 1972. The Gratuity Act caps the amount of gratuity at Rs 10 lakh. You need to complete at least five years of service in any organization to lay your claims on it.

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While companies are expected to give gratuity dues to employees in a fair and just manner, it is better to know what you are entitled to so that no clerical or administrative error leads you to get a lesser amount? Zee Business will teach you to calculate your Gratuity amount.