Salary, pension, and gratuity – all these together are one of the most important aspects of an employee’s life. Gratuity is usually given to a person who renders continuous service in any industry. If you have worked continuously for 5, 7, or 10 years in any department or company, it becomes imperative for you to know and have detailed knowledge about gratuity. Today by this news, we are going to tell you how the formula for gratuity calculation is made and which employees have the facility to take use of it. Let us know everything about gratuity through the news.
How is gratuity calculated?
If you have been working for a company for a long time, then you can also calculate gratuity yourself. There is a simple formula to calculate gratuity: (Last salary) x (Of years of service) x (15/26). So the gratuity normally relates to years of job and last salary drawn. Final salary means the average of your 10 months’ salary. This includes basic salary, dearness allowance and commission in your salary. There are 4 holidays in a month on Sundays, due to which only 26 working days are counted and on this basis gratuity is calculated on 15 days.
Comprehend gratuity calculation
If you worked in a company for 5 years and your last salary was Rs 35000, then if you calculate it according to the formula, your gratuity amount will be (35000) x (5) x (15/26) = Rs 1500. 1,00,961 (Gratuity amount calculation), according to which you will be getting Rs 1,00,961 as gratuity. However, if you worked in a company for 7 years and your last salary was Rs 50,000, then according to this formula, you will get (50000) x (7) x (15/26) = Rs 2,01,923 as gratuity.
This much gratuity will be given
If you worked for 10 years, this is for a salary of Rs 75000. In that case, if you have to calculate under this formula, then will give you (75000) x (10) x (15/26) = 4,32,692 as gratuity; that is, Rs 4,32,692 shall be given as gratuity by the institute, department, or company. Let us tell you that gratuity, like PF, has also been ruled by the government.
the rules of calculation change
From this formula, one can quite well conclude the amount of gratuity according to one’s last salary and years of working. But if your company is not registered under the Gratuity Payment Act, then the employees do not come under the scope of the Gratuity Act. Even so, you can avail yourself of its benefits, even if your company is not registered under the Gratuity Payment Act. In that case, gratuity calculation will have to be done differently. In this case, the amount you get on gratuity will be equal to half a month’s salary for every year, but a month will be considered 30 working days.
