Can someone explain what DA means and the 15 in the gratuity formula. Please i need a detailed break down of every variable in the formula
From Nigeria, Lagos
4From Nigeria, Lagos
DA stands for dearness allowance which is a component of statutory salary. By statutory salary, I mean, salary or wages as defined in various Labour Enactments and not the present day CTC.
Gratuity is calculated at the rate of 15 days salary (means basic salary + DA, if any) for every completed year of service. That is the significance of 15 in the formula. Now, a daily rate of wage is determined by dividing the monthly salary by 26 days. If in the completed service there is a fraction of a year exceeding six months, that shall be taken as one year. The maximum gratuity as per the Payment of Gratuity Act is Rs 10 lakhs.
Regards,
Madhu.T.K
From India, Kannur
Gratuity is calculated at the rate of 15 days salary (means basic salary + DA, if any) for every completed year of service. That is the significance of 15 in the formula. Now, a daily rate of wage is determined by dividing the monthly salary by 26 days. If in the completed service there is a fraction of a year exceeding six months, that shall be taken as one year. The maximum gratuity as per the Payment of Gratuity Act is Rs 10 lakhs.
Regards,
Madhu.T.K
From India, Kannur
Mr/Ms s10d5 is hereby requested to refer the Payment of Gratuity Act, 1972, and is requested to post a reply only after reading the question carefully. Regards, Madhu.T.K
From India, Kannur
From India, Kannur
No, the Payment of Gratuity Act is not meant for government employees who have different system of computing gratuity.
As already pointed out, the amount of gratuity will be based on salary of the employee at the time of leaving. The amount of gratuity will be 15 days salary for every one year of service. 15 days means average salary for 15 days calculated by dividing the monthly salary by 26 days. One month is taken as 26 days for calculation of gratuity since that calculation gives more benefit to employees rather than 30. That means employee leaving 7 years after joining will get around 3.5 months salary as gratuity @ half month salary for each year. But for calculation of this half month salary instead of 30 days as days in the month, 26 is taken leaving 4 off days generally available in a month.
Regards,
Madhu.T.K
From India, Kannur
As already pointed out, the amount of gratuity will be based on salary of the employee at the time of leaving. The amount of gratuity will be 15 days salary for every one year of service. 15 days means average salary for 15 days calculated by dividing the monthly salary by 26 days. One month is taken as 26 days for calculation of gratuity since that calculation gives more benefit to employees rather than 30. That means employee leaving 7 years after joining will get around 3.5 months salary as gratuity @ half month salary for each year. But for calculation of this half month salary instead of 30 days as days in the month, 26 is taken leaving 4 off days generally available in a month.
Regards,
Madhu.T.K
From India, Kannur
Dear Madhu,
i understood your explanation about gratuity. But, in order for everyone to make it clear, would you be so kind to show us the "formula" in calculating gratuity? i mean the standard formula.
thank you very much.
cheers!
samantha
From United Arab Emirates, Dubai
i understood your explanation about gratuity. But, in order for everyone to make it clear, would you be so kind to show us the "formula" in calculating gratuity? i mean the standard formula.
thank you very much.
cheers!
samantha
From United Arab Emirates, Dubai
Standard formula for calculating Gratuity=15/26X(Last Basic Drawn+DA,if any)X No of Years of Service,wherein the employees must complete 5 years of continuous service. Regards Videet
From India, Pune
From India, Pune
Hi
As per Gratuity Act, a person who serves continuously for more than 5 years, the existing company to pay him half month's salary for every completed year of service hence half month salary = 15 days
The calc would be = last drawn salary X 15/26Xno. of years of service from date of joining.
Hope the above is clear
Regds
jm raju
From India, Bangalore
As per Gratuity Act, a person who serves continuously for more than 5 years, the existing company to pay him half month's salary for every completed year of service hence half month salary = 15 days
The calc would be = last drawn salary X 15/26Xno. of years of service from date of joining.
Hope the above is clear
Regds
jm raju
From India, Bangalore
Gratuity Calculation As Per Act (At leaving time) = Basic+D.A*15*yers of Service (not less than 5 )/26 Maximum Amount Rs 10 lacs D.N Sharma- GGN
From India, Delhi
From India, Delhi
Hi, We can simply do it by (Basic Sal * No of Months of Service) * 4.81% - Minimum 5 yrs(60 Months). You will also get interest on it. Regards, Sumanth
From India, Hyderabad
From India, Hyderabad
you can calculate the gratuity from this formula:
Last Drawn BASIC+Da/26*15* no.of years in Continues service.
Any one is entitle for Gratuity after 5 years service. if there is one day after six month it should be count full year .
For Example : if some one has complete 4 years and six months service he is entitled for Gratuity.
15 days is mandatory as per law. but its depend on company policy . company can pay more than 15 days salay in a year like 20 days,30 days,90 days.
only Basic and DA will be treat as salary.
From India, Alwar
Last Drawn BASIC+Da/26*15* no.of years in Continues service.
Any one is entitle for Gratuity after 5 years service. if there is one day after six month it should be count full year .
For Example : if some one has complete 4 years and six months service he is entitled for Gratuity.
15 days is mandatory as per law. but its depend on company policy . company can pay more than 15 days salay in a year like 20 days,30 days,90 days.
only Basic and DA will be treat as salary.
From India, Alwar
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Break.zip
Salary Break Up.xlsx
FORM-F-NOMINATI ON OF GRATUITY.pdf