Gratuity Calculator: Rs 39,000 as last-drawn salary, 5 years and 7 months of service; what will be gratuity amount? Know here
Gratuity Calculator: Organisations that follow the Payment of Gratuity Act, 1972, need to provide gratuity to their employees who have completed 5 years of service. The employee's last-drawn basic salary and years of service are considered for the calculation of gratuity.
Gratuity Calculator: When will I become eligible for gratuity? Does my organisation provide gratuity? These are likely to be the first two questions that strike the mind of an employee who is starting their career. But why, in the first case, do companies need to provide gratuity? When do employees become eligible to get it? Can a company deliberately deny its employees gratuity? Can a firm opt out of providing gratuity after handing it out for some years? Get the answers of these questions. In the end, also see the calculation of gratuity for a person whose last-drawn basic salary was Rs 39,000 and had completed 5 years and 7 months of service.
Photos: Unsplash/Pixabay
Why companies provide gratuity
The Payments of Gratuity Act, 1972, makes it mandatory for companies following the act to provide gratuity to the employees who have completed 5 years of service.
Why companies provide gratuity
It is a reward to the employees for their allegiance and years of service they have rendered to the company. Since it is mandated by the government, all the companies under the act need to provide gratuity.
Which employees are eligible to get gratuity?
As per the Act, employees working in a mine, factory, plantation, port, oilfield, railway company, shop, or establishment where 10 or more persons are employed or were employed on any day of the last 12 months are eligible.
Which employees are eligible to get gratuity?
Other than that, employees working in establishments or classes of establishments where 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 to get the gratuity amount.
When do employees get gratuity?
They get it at their resignation, retirement, termination, superannuation, or disablement. If the employee dies, their family gets the gratuity amount.
Can a company stop providing gratuity to employees?
If any organisation has come under the Payments of Gratuity Act, they can't move out and need to provide gratuity to its employees.
How is gratuity calculated?
The first condition is the completion of 5 years of service. If someone has completed at least 6 months of service after that, they are eligible to get gratuity for the full year. The years of service and the last-drawn basic pay are considered to calculate gratuity.
What is the gratuity formula?
Gratuity= (Last Drawn Salary x Number of Years of Service) X 15/26
What is the gratuity formula?
Here 15 refers to 15 days’ wages per year, which is the gratuity payable.
26 refers to 30 days in a month excluding Sundays.
Gratuity Calculator: Gratuity on Rs 39,000 last-drawn basic salary and 5 years and 7 months of service?
In this condition, the years will be counted as 6 years.
The estimated gratuity amount in such conditions will be Rs 1,35,000.