Gratuity Calculator: Entitlement can be claimed even before 5-years of service in this dire situation; know how to calculate entitlement
Gratuity Calculator: A person who has completed five years of regular service in an organisation is entitled for a gratuity benefit. But, for information to an employee, this rule does not apply in case of death or disablement. In the event of an unfortunate death or disablement of an employee, the government has waived off the requirement of any minimum eligibility period. But before knowing about other important aspects, know how to calculate death gratuity.
What Gratuity Act says
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. Photo: Reuters
Formula for death gratuity calculation
Death Gratuity Calculation Formula: 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. Gratuity = [T X B X 15]/26. Here, 'T' is the tenure of service completed by the employee and 'B' is the last drawn basic salary + dearness allowance. Photo: Reuters
Let's understand with an example
Let's assume you have worked with an organisation for a period of 10 years and the last drawn basic salary along with dearness allowance was Rs 50,000. The amount of gratuity = [10 x 50000 x 15]/26 = Rs 288,461.53. Photo: Pixabay
Some facts that you must know
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. Photo: PTI
What Gratuity means for an employee
Gratuity is the money that is paid by an employer to his employee in return for its services. It is governed by the Payment of Gratuity Act 1972. Photo: IANS