Know Your Gratuity: Have Rs 35,000 as last-drawn basic pay and 5 years and 6 months of service? Here's how much gratuity you can get
Know Your Gratuity: Employees who have completed at least 5 years of uninterrupted service are eligible to get gratuity from their organisation, provided it follows the Payment of Gratuity Act, 1972. The last-drawn basic salary and dearness allowance (DA) of the employee and their total years of service determine their gratuity amount.
Know Your Gratuity: Do you get some incentive for your long years of service from your organisation? Every company may have some process to acknowledge their employees' long contribution. Or they may ignore it altogether. But to make sure they don't ignore it and reward their employees for rendering long-term service, the government made gratuity mandatory. Paying gratuity to their employees is compulsory for the companies following the Payment of Gratuity Act, 1972. But when do they become eligible? Which companies pay gratuity to their employees? Can an establishment opt out of the Gratuity Act? When do they qualify to get gratuity? What will be the gratuity for a person with Rs 35,000 as the last-drawn basic pay and dearness allowance (DA) and 5 years and 6 months of service? Know answers to these questions?
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When do you become eligible to get gratuity?
If you have completed 5 years of uninterrupted service in a company following the Payment of Gratuity Act, 1972.
When do you become eligible to get gratuity?
An employee can get gratuity at the time of leaving the organisation after completing the minimum eligibility criteria of 5 years, on his superannuation, retirement, or resignation, or on his death or disablement due to an accident or disease.
Can a company deny gratuity to an employee?
Under the Act, they can't deny the gratuity amount to their employee.
Can a company deny gratuity by opting out of the Gratuity Act?
Once they come under the Act, they can't opt out and need to provide gratuity to their employees. The Act says, "A shop or establishment to which this Act has become applicable shall continue to be governed by this Act notwithstanding that the number of persons employed therein at any time after it has become so applicable falls below 10."
Which companies provide gratuity to their employees?
As per the Act, the organisations that need to pay gratuity are-
1. Every factory, mine, oilfield, plantation, port, and railway company
Which companies provide gratuity to their employees?
2. Every shop or establishment within the meaning of any law for the time being in force in relation to shops and establishments in a state, in which 10
or more persons are employed, or were employed, on any day of the preceding 12 months.
Which companies provide gratuity to their employees?
3. Such other establishments or class of establishments, in which 10 or more employees are employed, or were employed, or, any day of the preceding 12 months, as the Central Government may, by notification, specify in this behalf.
In how many days should an eligible person get gratuity?
The Act says that the employer shall arrange to pay the amount of gratuity within 30 days from the date it becomes payable to the person to whom the gratuity is payable.
What are factors to determine gratuity amount?
Wages that are paid or are payable to them in cash and include dearness allowance are counted (last-drawn basic salary). The second factor is the number of years of service.
What is the formula to calculate gratuity?
Gratuity = (Last Drawn Salary x Number of Years of Service) X 15/26
Here, the number 15 refers to 15 days’ wages per year, which is the gratuity payable.
26 refers to 30 days in a month excluding Sundays.
What will be gratuity on Rs 35,000 basic and 5 years and 6 months of service?
The estimated gratuity amount under these conditions will be Rs 1,21,154.