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While evaluating gratuity, you need to also make sure whether the employee has received any gratuity from his previous employers. If so then his entitlement has to take that also into consideration as his entire gratuity benefit (all employment taken together) should not exceed 3.5 lacs.
If a basic of an employee is revised in between the fical year, then how to calculate the gratuity? eg 1st year basic is Rs. 4000, after 7th month basic is revised to Rs. 5000.
Yes i have some idea about the calculation of gratuity , it calculates on minimum wages of 15 days or 7 days per month. — — — — brianna
1. 5 Years Of Continuous Service Would Also Include 4years & 6 Months Plus Service Which When Rounded-up Is 5 Years.
2. Break In Service Periods May Be Excluded From Gratuity Calculation I.e. If Somebody Remains On Unauthorised Absence For A Long Period But Not Dismissed, Such Period May Be Deducted From Total Period Of Service For Gratuity Calculation.
Any Comments?

Objective : We have a policy of GRatuity calculation as follows:
1. Any employee who works less 3 years 3 weeks is paid as gratutiy annual.
2. >3 years and < 5 years paid 4 Weeks
3. > 5 years and < 10 years paid 1 month
4. > 10 years paid 1 1/2month
How to calculate ?
1. person working for 5 years 6 months
2. Person Working for 18 years
3. Person working for 9 years and 9months
can anyone explain
Thanks
Venugopal

Hi Venu,

Few Fundamentals whilst Paying Gratuity:

1. Employee has to Complete 5 Years of Continous Service
2. Employee should have worked for min. 240 Days in Every Year(Excluding Holidays, but inclusive of Leave)
3. @ the time of leaving the no.of Years should be rounded of to the nearset number, Ex: 5 years 6 defines that She/He has completed 5.5 Years hence, to be Rounded of to 6 Years. Likewise 5 Years 5 Months defines 5.45 Years hence, to be rounded of to 5 Years.
4. Basic is defined to be as Last Drawn Basic which includes Spl. Allowance+Dearness Allowance (if any).

So, the working is as follows:

Gratuity=Last Drawn Basic*15/26*No.of Years of Service.

As far as your company policy is considered you might have structured your CTC which includes annual provision of Gratuity. Hence you may use the same formula, but, paying any Employee His/Her's Gratuity for less than 5 completed years of continous service would only be for Employees Who have expired during the Employment due to any reason. Else, it is a non-statutory facility if you are paying for less than 5 Years.

Regards,

Chaitanya

can anybody tell me about the Superannuation. whats the procedure of funding it back from organization and whats its use to employee. Ritu Bhardwaj
one of friend is deprived of gratuity after 11 years of services. The management is saying there is no gratuity in our company and daring him to go to court. Can anybody suggest a solution for this situation.

I slightly differ from Mr Rahul that company need to have it's own trust for payment of gratuty if it want to pay even after 3 Yrs. It is binding libility on employer to pay the gratuty after 5 yrs but no restriction on employer if he wants to pay even afet 3 yrs. In any case gratuty is not deducted from employee salary and deposited in any fund like PF. Trust restriction is only in case of PF & ESI if it is more benificial than gov. fund.
Pl. support your knowledge in matter.
Ramanuj Rai


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