Gratuity Calculator: 10 years of service and Rs 55,000 last drawn basic salary; how much gratuity will you get; know here
Gratuity Calculator: A public or private sector employee with at least 5 years of service becomes eligible to get gratuity. For gratuity calculation, the last drawn basic salary of an employee and the years of service are taken into account.
Know Your Gratuity Amount: Public and private sector companies provide gratuity to their employees when they complete 5 years of service with the establishment. Gratuity is a kind of token of appreciation for employees who render their services to the company. It honours the dedication and allegiance of employees and provides them monetary safeguard during their exit from the company or at the time of retirement. It also encourages them to stay with the company since the longer they stay, the higher is the gratuity amount. Gratuity is determined by the employee's years of service with the company and their last drawn basic salary at the time of exiting the organisation. In this write-up, learn more about gratuity and what will be the gratuity amount for an employee with 10 years of service and Rs 55,000 as the last drawn basic pay.
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Who is eligible for gratuity?
As per Payment of Gratuity Act, 1972, employees working in every factory, mine, oilfield, plantation, port, railway company, shop, or establishment in which 10 or more persons are employed, or were employed, on any day of the preceding 12 months, are eligible to get gratuity.
Who is eligible for gratuity?
Apart from that, employees working in other establishments or classes 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 specification, are eligible to get gratuity.
Who is eligible for gratuity?
Here, an important factor is that once a shop or establishment that comes under the Gratuity Act will remain under it forever, even if the number of employees is less than 10.
When does one get gratuity?
An employee can get gratuity on the termination of their employment after they have rendered continuous service for at least 5 years; on their superannuation; on their retirement or resignation; or on their death or disablement due to accident or disease.
How is the gratuity amount decided?
Gratuity is decided on the basis of the last drawn basic pay and the years of service.
How is the gratuity amount decided?
If two persons are drawing the same basic salary at the time of leaving an organisation but they have different years of service, the one with longer tenure will get a higher gratuity.
How gratuity is calculated
The formula to calculate the gratuity amount is= (Last drawn salary)X(Number of years in employment)X(15/26)
How gratuity is calculated
An important thing to know here is that 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. On the other hand, 26 is the number of working days in a month after excluding Sundays.
What will be the gratuity amount on Rs 55,000 monthly salary?
Since we are calculating the gratuity for an employee with Rs 55,000 as the last drawn basic salary and 10 years of service, the gratuity amount for them will be = Rs 55,000X10X15/26= Rs 3,17,308.