Gratuity Calculator: Rs 38,000 as last-drawn basic salary, 6 years and 3 months of service; find out your gratuity amount
Let’s find out what will be your gratuity amount with Rs 38,000 as the last-drawn salary in the service period of 6 years, and 3 months. Understand the calculation to estimate your retirement benefit accurately.
Gratuity is a payment made to an employee as a reward for working with a company for a long time. To be eligible for gratuity, an employee must complete at least 5 years of continuous service. The amount is given when an employee leaves the job or retires, depending on how long they’ve worked. In some cases, the company may choose not to pay the gratuity. Here, we will calculate the gratuity for an employee with a last-drawn basic salary of Rs 37,000 and 6 years and 3 months of service.
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(Disclaimer: Our calculations are projections and not investment advice. Do your due diligence or consult an expert for financial planning)
Understanding Gratuity
Gratuity is the amount that the employer pays to their employees for their long service to the company. The payment is made in a lump sum to the employee only after completing 5 years of service.
More about Gratuity
Gratuity is governed by the Payment of Gratuity Act, 1972. In case the eligible candidate dies, their family member receives a gratuity.
What should be the length of service?
To be eligible for gratuity, employees must have completed uninterrupted 5 years of service in an organisation.
Eligibility criteria for gratuity?
The organisation must come under the Payment of Gratuity Act, of 1972.
The employees must have completed continuous 5 years of service.
Can a company opt out of the Payment of Gratuity Act?
If a company falls under the Payment of Gratuity Act, 1972, it cannot count itself out.
Other conditions that count one eligible for gratuity?
Gratuity is payable not only at the time of retirement but also in various situations. Such as:
Superannuation
Termination
Resignation
Death or disablement
How many years of service are considered?
One needs to complete at least 5 years of uninterrupted to get gratuity.
Organisational criteria for gratuity payment
Organisations employing 10 or more individuals over the past years and following the Payment of Gratuity Act, of 1972, are required to pay gratuity.
What are the factors that determine the gratuity amount?
The number of years and the last-drawn basic salary of an employee can be used to calculate the gratuity amount.
What is the formula to calculate gratuity amount?
(Last Drawn Salary x Number of Years of Service) X 15/26
Here 15 refers to 15 days’ wages per year, and 26 refers to 30 days in a month excluding Sundays.
Gratuity Calculations: Rs 38,000 as last-drawn salary, and 6 years and 3 months of service; find out your gratuity amount
The estimated gratuity amount of the individual will be Rs 1,31,538.