Gratuity Calculator: Rs 45,000 last-drawn basic salary; 6 years of service; what will be gratuity amount?
Gratuity Calculator: When an employee works in a company for more than 5 years, they become eligible to receive gratuity. The employer is bound to provide gratuity to its employees under the Gratuity and Payments Act, 1972.
Gratuity Calculator: It is human nature that when a person works with an organisation for a long time, they expect someone extra in return from their employers as a token of appreciation. They think they have given a part of their professional career to the company, which now should reward them monetary. If they have worked for over 5 years in an organisation that is following the Payments of Gratuity Act, 1972, they become eligible to get that token of appreciation from their employer in the form of gratuity. Gratuity is an amount that the employers are bound to provide to their employees if they have completed continuous service of 5 years. Employees get gratuity at the time of leaving the organisation. In this write-up, know more about gratuity, who is eligible to get it, how it is calculated, and what will be the estimated maturity amount if one's last-drawn basic salary was Rs 45,000 and they had completed 6 years of service.
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Which organisations provide gratuity
As per the Act, the eligible employees are those working in a mine, factory, plantation, oilfield, railway company, port, shop, or in an establishment where 10 or more persons are employed or were employed on any day of the preceding 12 months.
Which organisations provide gratuity
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.
When can an employee get gratuity?
An employee gets gratuity at retirement, resignation, disablement, or termination. Their family gets the gratuity amount in case of the employee's death.
Conditions for employees to get gratuity
If the employee has completed 5 years of continuous service. But the 5-year condition is waived off if the employee has died or has become disabled during the service due to some accident or disease.
Can organisations opt out of paying gratuity?
They can't. Once a company comes under The Payment of Gratuity Act, 1972, it is bound to provide maturity to its employees.
How is gratuity calculated?
There are two important factors: the last-drawn basic salary and dearness allowance and the number of service years.
What is the gratuity formula?
Gratuity= (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 on Rs 45,000 last-drawn basic salary and 6 years of service
The estimated gratuity under these conditions will be Rs 1,55,769.