Gratuity Calculator: 12 years of service and Rs 60,000 as last-drawn basic salary, what will be gratuity amount; know here
Gratuity Calculator: Public and private sector employees on completion of 5 years of service become eligible for gratuity from their employers. Employees get gratuity on the basis of their last drawn salary and the years of service in the organisation they are exiting.
Know Your Gratuity Amount: Human nature is that when they work for someone for a long time, the least that they require is appreciation from the employer for the service they have rendered to them. The best is when they get this appreciation in the form of money. Gratuity is exactly that amount. Organisations that come under the Payment of Gratuity Act, 1972, are mandated to give gratuity to their employees at the time of leaving the orgsnisation. While it rewards the outgoing, long-serving employees, it also encourages working employees to prolong their stay with the company. In this write-up, we will tell how much gratuity an employee with 12 years of service and having Rs 60,000 as the last-drawn salary will get.
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Which employee is eligible to get gratuity?
An employee can get gratuity on the completion of 5 years of service under conditions such as the termination of their employment, resignation or retirement, superannuation, death, or their disablement due to an accident or a disease.
Which organisations should provide gratuity to their employees?
The Payment of Gratuity Act, 1972, says that employees who are working in a factory, mine, oilfield, plantation, port, railway company, shop, or in an establishment where 10 or more persons are employed, or were employed, on any day of the preceding 12 months, are eligible to get gratuity.
Which organisations should provide gratuity to their employees?
Apart from that, employees working in establishments or classes of establishments in which 10 or more employees are employed, or were employed, on any day of the preceding 12 months, as per the Central Government specification, are also eligible for gratuity.
Which organisations should provide gratuity to their employees?
An important point to remember here is that once a shop or establishment comes under the Gratuity Act, it will remain under it forever, even if the number of employees falls below 10.
How is the gratuity amount calculated?
The gratuity amount is calculated on the basis of the last-drawn basic salary of an employee and the years of service they have rendered.
How is the gratuity amount calculated?
Gratuity can be different for two people with the same tenure of service but with different last-drawn salaries.
What is the formula to calculate gratuity?
The formula to calculate gratuity is = (Last drawn basic salary) X (Number of years in employment) X (15/26)
What is the formula to calculate gratuity?
As per the Payment of Gratuity Act, 1972, for every completed year of service in excess of six months, the employer shall pay gratuity to an employee at the rate of 15 days wages based on the rate of wages last drawn by the employee. In the formula, 26 is the number of working days in a month after excluding Sundays.
What will be the gratuity amount on Rs 60,000 last-drawn basic pay and 12 years of service?
Since we are calculating gratuity for an employee with Rs 60,000 as the last drawn basic salary and 12 years of service, gratuity will be = Rs 60,000X12X15/26= Rs 4,15,384.62.