Dear All,
I have a doubt: is it compulsory to complete five years to become eligible for gratuity? Also, for gratuity calculation, please confirm if the below formula is correct: basic salary * 15/26 * number of years in service.
Thanks & Regards,
Prakash Rawat
From India, Gurgaon
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7I have a doubt: is it compulsory to complete five years to become eligible for gratuity? Also, for gratuity calculation, please confirm if the below formula is correct: basic salary * 15/26 * number of years in service.
Thanks & Regards,
Prakash Rawat
From India, Gurgaon
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Dear Prakash Ji, Gratuity actual calculate is - 15/26*no of service year and month*basic salary
From India, Bhopal
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From India, Bhopal
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Hi all can you provide payroll proceess QC template in Excel Regards, manjuanth 9743481431
From India, Bangalore
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From India, Bangalore
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Calculation of Gratuity as per Sec. 4 of the Gratuity Act is as follows:
Monthly Salary (Basic+DA) / 26 * 15 * number of years of service = Amount of Gratuity payable (Must not exceed Rs. 10 lakh)
Yes, as per Section 4 of the Act, the minimum qualifying period is 5 years.
pkjain
From India, Delhi
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Monthly Salary (Basic+DA) / 26 * 15 * number of years of service = Amount of Gratuity payable (Must not exceed Rs. 10 lakh)
Yes, as per Section 4 of the Act, the minimum qualifying period is 5 years.
pkjain
From India, Delhi
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Gratuity is applicable only to Basic and Dearness Allowance of the employee. To calculate the gratuity, the formula is: (A month's salary + DA) divided by 26 days (i.e., month) multiplied by the number of years of service completed. The qualifying period is 5 years.
From India, Coimbatore
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From India, Coimbatore
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Dear Mr. Prakash,
Gratuity eligibility comes after continuous five years of service. The five-year service means four years and 240 days of the 5th year, i.e., four years, 10 months, and 18 days. But at the time of calculation, if there is more than six months or part thereof, it will be considered as one year.
Please find enclosed judgment; I hope that will serve your purpose.
With Regards,
Sandip Saha
Email: sandisaha@gmail.com
From India, Kolkata
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Gratuity eligibility comes after continuous five years of service. The five-year service means four years and 240 days of the 5th year, i.e., four years, 10 months, and 18 days. But at the time of calculation, if there is more than six months or part thereof, it will be considered as one year.
Please find enclosed judgment; I hope that will serve your purpose.
With Regards,
Sandip Saha
Email: sandisaha@gmail.com
From India, Kolkata
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To avail gratuity after 5 years of service, for regular employees working 160 days in mines and 240 days for seasonal employees, the maximum amount that can be given is 3,50,000.
For monthly employees, the calculation is as follows:
Last drawn wages / 26 * 15 * number of years of service completed.
In the case of mines or piece-rated employees:
Average wages / 26 * 15 * number of years completed.
For seasonal employees:
7 days of wages for every completed year of service.
From India, Madras
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For monthly employees, the calculation is as follows:
Last drawn wages / 26 * 15 * number of years of service completed.
In the case of mines or piece-rated employees:
Average wages / 26 * 15 * number of years completed.
For seasonal employees:
7 days of wages for every completed year of service.
From India, Madras
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it can exceed 10 lakhs, there is no margin on that, its that if it crosses 10 lkhs, then it becomes taxable.
From India, Calcutta
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From India, Calcutta
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Dear Prakash,
Mr P K Jain has rightly descibed the formula for calculation of Gratuity. However, I would like to throw some light on eligibility for Gratuity entitlement in the fifth year.
The gratuity eligibility as per Gratuity Act 1972 is 5 years of continuous service. Sub Section (2) of Section 4 of Gratuity Act, 1972 is for calculation of gratuity and not for the eligibility of gratuity.
But as per the judgment of the Supreme Court, an employee is eligible for gratuity if he has completed 4 years of continuous service and 240 days continuous working in 5th year. On the day when he completes his 240 days in the 5th year he will be eligible for gratuity.
The judgment of Supreme Court rendered under the provisions of the Industrial Dispute Act in Surendra Kumar Verma vs. Central Govt. Industrial Tribunal, [(1980) (4) S.C.C.433)], it is enough that an employee has a service of 240 days in the preceding 12 months and it is not necessary that he should have completed one whole year’s service. As the definition of continuous service in Industrial Dispute Act and Payment of Gratuity Act is synonymous, the same principal can be adopted under the act also and hence an employee rendering service of 4 year 10 months and 11 days is considered to have completed 5 years continuous service under Sub Section (2) of Section 4 and thereby is eligible for gratuity."
Now almost all organizations are paying gratuity if an employee has completed 4 years of continuous service and 240 days continuous working in the 5th year.
There is one more judgment as delivered by the Madras High Court on the eligibility of gratuity is as under :
Hon’ble Justice Mr. S.M. Abdul Wahab J. (W.P. No. 2135 of 1987) gave his verdict on 12.6.1996 in the case betwee Mettur Beardse Ltd., Madras and Regional Labour Commissioner (Central), (Authority under Payment of Gratuity Act) & Others (1998 LLR 1072).
Thus an employee who has put in service for 10 months and 18 days for the fifth year subsequent to first 4 years should be deemed to have completed continuous service of five years. His claim for gratuity is tenable.
Rgds,
Rakesh Pd Srivastav
From India, Gurgaon
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Mr P K Jain has rightly descibed the formula for calculation of Gratuity. However, I would like to throw some light on eligibility for Gratuity entitlement in the fifth year.
The gratuity eligibility as per Gratuity Act 1972 is 5 years of continuous service. Sub Section (2) of Section 4 of Gratuity Act, 1972 is for calculation of gratuity and not for the eligibility of gratuity.
But as per the judgment of the Supreme Court, an employee is eligible for gratuity if he has completed 4 years of continuous service and 240 days continuous working in 5th year. On the day when he completes his 240 days in the 5th year he will be eligible for gratuity.
The judgment of Supreme Court rendered under the provisions of the Industrial Dispute Act in Surendra Kumar Verma vs. Central Govt. Industrial Tribunal, [(1980) (4) S.C.C.433)], it is enough that an employee has a service of 240 days in the preceding 12 months and it is not necessary that he should have completed one whole year’s service. As the definition of continuous service in Industrial Dispute Act and Payment of Gratuity Act is synonymous, the same principal can be adopted under the act also and hence an employee rendering service of 4 year 10 months and 11 days is considered to have completed 5 years continuous service under Sub Section (2) of Section 4 and thereby is eligible for gratuity."
Now almost all organizations are paying gratuity if an employee has completed 4 years of continuous service and 240 days continuous working in the 5th year.
There is one more judgment as delivered by the Madras High Court on the eligibility of gratuity is as under :
Hon’ble Justice Mr. S.M. Abdul Wahab J. (W.P. No. 2135 of 1987) gave his verdict on 12.6.1996 in the case betwee Mettur Beardse Ltd., Madras and Regional Labour Commissioner (Central), (Authority under Payment of Gratuity Act) & Others (1998 LLR 1072).
Thus an employee who has put in service for 10 months and 18 days for the fifth year subsequent to first 4 years should be deemed to have completed continuous service of five years. His claim for gratuity is tenable.
Rgds,
Rakesh Pd Srivastav
From India, Gurgaon
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