Gratuity: 5, 7 or 10 years...however long the job lasts, how much gratuity will the company give you? Calculate like this
Gratuity Calculation: If you have worked in a company continuously for 5, 7 or 10 years, then how much gratuity will you be entitled to receive? Know here the formula through which you can easily do this calculation yourself.
Gratuity Calculation Formula: According to the rules of Gratuity Payment Act 1972 (Gratuity Act 1972), if you have completed 5 continuous years of service in a company, then you become entitled to receive gratuity amount from that company. However, the scope of this Act includes those companies in which 10 or more employees work.
Gratuity is the amount given by a company to an employee as a reward for his good services over a long period of time. Usually this amount is given on leaving the job or at the time of retirement. If you have also worked in a company continuously for 5, 7 or 10 years, then how much gratuity will you be entitled to receive? Know the Gratuity Calculation Formula here.
Gratuity is calculated by this formula
There is a formula to calculate gratuity - (last salary) x (number of years worked in the company) x (15/26). Last salary means the average of your last 10 months' salary. Basic salary, dearness allowance and commission are included in this salary. Due to 4 Sundays being week off in a month, 26 days are counted and gratuity is calculated on the basis of 15 days.
Understand the method of calculation
Suppose you worked in a company for 5 years and your last salary was Rs 35,000, then according to the formula (35000) x (5) x (15/26) = Rs 1,00,961, your gratuity amount will be Rs. Similarly, if you worked in a company for 7 years and the last salary was Rs 50,000, then the calculation formula would be (50000) x (7) x (15/26) = gratuity of Rs 2,01,923. Whereas if you have served the company continuously for 10 years. Your last salary was Rs 75000. In such a situation, if you calculate according to the formula, you will get (75000) x (10) x (15/26) = Rs 4,32,692 as gratuity. In this way you can calculate the amount of gratuity according to your last salary and years of work.
The calculation is different in this situation
When the company or institution is not registered under the Gratuity Act, then the employees are not covered under the Gratuity Act. But in such a situation, if the company wants, it can give gratuity to the employee, but in such a situation the formula for determining gratuity becomes different. In such a situation, the amount of gratuity will be equal to half a month's salary for every year. But the number of working days in a month will be considered as 30 days, not 26.
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