Advertisement

Search This Website

Tuesday, August 11, 2020

How to Calculate Gratuity  intresting calculation

How to Calculate Gratuity  intresting calculation

Eligibility for gratuity requires 5 years of employment in one place


The Gratuity Payment Act was enacted in 1972 to protect the interests of employees

Delhi. The central government is considering a change in the rules of gratuity payment for employees. Under this, the government is considering reducing the period of gratuity payment for employees from 5 years to 1 to 3 years. Gratuity is the amount paid to an employee on behalf of the organization or employer. But for this he needs to work for at least five years. Typically, this amount is paid when an employee leaves the job, is fired or retires.

Gratuity is received 5 years before the death of the employee
Apart from this, if an employee dies due to any reason or loses his job due to illness or accident, he or his nominee gets the amount of gratuity. As per the rules of Gratuity Payment Act 1972, the amount of gratuity can be up to a maximum of Rs. 20 lakhs.

Gratuity Payment Act 1972
The Gratuity Payment Act was enacted in 1972 to protect the interests of employees. Under the Act, employees are employed in the mining sector, factories, oil fields, forest areas, companies and ports where all other sectors employ 10 or more employees. Gratuity and provident are completely different. The full money in gratuity is paid by the employer, while in the provident fund a little money is also taken from the employee.

Which organization comes under this Act?
Any organization where 10 or more employees work any one day during the last 12 months is covered under the Gratuity Payment Act. Once it comes under the Act, even if the number of employees in the company is less than 10, it remains for this Act forever.

Employees under this Act are divided into 2 categories
Under the Gratuity Payment Act 1972, employees are divided into two categories to determine the formula for the amount of gratuity to be received. The first category includes employees who fall under the purview of the Act, while the second category includes employees outside the Act. Employees working in both the private and government sectors are covered in these two categories. Under the second category, the employer (company or organization) which does not fall under the purview of the Gratuity Act may also grant gratuity benefits to its employees if it so desires.

How is gratuity calculated?
Category 1- Employees who fall under the Gratuity Payment Act 1972.

Class 2 - Employees who do not fall under the Gratuity Payment Act 1972.

How is gratuity calculated?

Formula for calculating gratuity for category 1: (15 x previous salary x working period) / 26


Last Salary = Basic Salary + Inflation Allowance + Commission on Sales (if received). In this formula the employee is paid an average of 15 days, counting 26 working days of the month.


Job Duration = In the last year of the job if he works above 6 months it will be considered as full year. For example, after 5 years and 7 months of service it will be considered as full 6 years.


Example- Mr. Sun leaves the job after working for 5 years and 8 months in A Limited. During the last month of his retirement, his basic salary was Rs. 13000 per month. According to the formula in this case, the amount of his gratuity will be as follows.


How much gratuity will be given: 13,000x6x15 / 26 = Rs. 45,000


READ DETAIL NEWS IN GUJARATI


Formula for calculating gratuity for category 2: (15 x previous salary x working period) / 30

Last salary = basic salary + inflation allowance + commission on sale (if any). In this formula, an employee is paid an average of 15 working days, counting 30 working days a month.


Job Duration = No less than 12 months is added to the last year of employment for such employees. For example, if an employee works for 5 years and 7 months, it will only count as 5 years.


Example- Mr. Moon quits his job after working in B Limited Company for 5 years and 8 months. His basic salary during the last month of his retirement was Rs 13,000 per month. This company does not fall under the purview of the Act. In such a situation, according to the formula, Mr. That would be the amount of Moon's gratuity.


How much gratuity will be given: 13000x5x15 / 30 = 32,500 rupees


Calculation in case of death of the employee


In case of death of the employee, gratuity is paid depending on the duration of the job, up to a maximum of Rs 20 lakh.


No comments:

Post a Comment

Please Post Your Valuable Comment Here

Advertisement

માત્ર તમારુ Mail ID નાખો અને મેળવો તમામ અપડેટ

Sponsor AD

Popular Posts