Gratuity calculation


An Employee started his service in 1977. The Employer had promised gratuity as - 1. 15 days salary year 1977 to year 1993 2. one month gratuity contrary to 15 days as advisable by payment of Gratuity Act 1972 from 1994 to 2008. 3. From 2009 onwards the gratuity has been promised as per Act only. Employee Retired in August 2015. Now question is how to calculate gratuity- 1. Specially for period of one month during 1994 to 2008 - a. 15/26 * (no of years) *2 c. Last month salary/365*30 2. 15 days salary before 1977 to 1994 a. 15/30 * no of years b. 15/26 * no of years c. last month salary/365 * 15 Thanks & regards, Naresh
 
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FIN

You are from which side: Employer or Employee?

 

Payment of Gratuity Act states that employer can provide for better terms of Gratuity.

There is no wage ceiling.

The calculation of Gratuity is:

 

{( Basic+DA)/26*15*No of years of service}

Here Basic+DA is as per last drawn salary.

For the years the Gratuity was promised as per 30days salary the calculation may be:

{( Basic+DA)/26*30*No of years of service}………………….. Basic+DA is as per last drawn salary

 

For rest of the years it may be:

{( Basic+DA)/26*15*No of years of service}……………. Basic+DA is as per last drawn salary.

 

It is generic rule that benefits once given can not be withdrawn.

 

 

 
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