Gratuity Calculator: Rs 42,000 as last-drawn salary and 6 years and 2 months of service; what will be gratuity amount?
Gratuity Calculator: Employees who work in the organisations that follow the Payment of Gratuity Act, 1972, are eligible to get gratuity. Employees with at least 5 years of uninterrupted service can get gratuity.
Gratuity Calculator: Employees who have long-time association with their establishments following the Payment of Gratuity Act, 1972, are eligible to get the gratuity amount. The amount is based on the employee's last-drawn basic salary and years of service. The minimum years of uninterrupted service to be eligible to get maturity is 5 years. Gratuity is kind of a reward from the employer to the employee. They get it at the time of leaving the organisation. Know more about gratuity in this write-up, and also know what will be the gratuity amount for a person with Rs 42,000 as the last-drawn salary and 6 years and 2 months of service.
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What does Payment of Gratuity Act instruct?
As per the Payments of Gratuity Act, 1972, it is mandatory for companies following the act to provide gratuity to their employees with at least 5 years of continuous service.
Who gets maturity
As per the Act, employees working in a mine, factory, plantation, railway company, oilfield, port, shop, or establishment where 10 or more persons are employed or were employed on any day of the preceding 12 months are eligible.
Who gets maturity
Apart from that, employees working in establishments or classes of establishments where 10 or more employees are employed, or were employed, on any day of the last 12 months, as per the Central Government specification, are also eligible for gratuity.
When can employees get gratuity amount?
Employees get the gratuity amount at their resignation, termination, superannuation, retirement, or disablement. In case of the employee's death, their family member receives gratuity.
Can a company stop providing gratuity to employees?
Once a company follows the Payments of Gratuity Act, they can't dissociate themselves from the act and need to provide gratuity to their employees in the future.
How are service years counted in gratuity?
The minimum service required is 5 years. After that, even if one has completed 6 months of service, it will be counted as a full year.
How are service years counted in gratuity?
E.g., if one has completed 5 years and 2 months of service, their service will be counted as 5 years, but if the same person has completed 5 years and 7 months of service, the service years will be counted as 6 years.
Factors to calculate gratuity
The calculation for the gratuity amount is based on the number of years of service and the last-drawn monthly salary.
Gratuity formula
Gratuity of an employee= (Last Drawn Salary x Number of Years of Service) X 15/26
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 amount for Rs 42,000 as last-drawn salary and 6 years and 2 months of service
The number of years here will be 6 years.
The gratuity amount will be Rs 1,45,385.