In my organization the salary is made on 30-31 days basis, in gratuity calculation formula the base days is taken as 26. So now if I have to calculate the number of days an employee has worked during an year should be on the basis of his number of days salary made (30-31 format) or on the basis of 26. If I’ve to follow 26 days format then do I’ve to exclude/include holidays also in working days.
From India, undefined
From India, undefined
If the salary is monthly rate then the monthly salary should be divided by 26 as per PG Act. But if it is in daily rate, then the formula will be daily rate x 15 x yrs of completed service.
S K Bandyopadhyay ( WB, Howrah)
CEO-USD HR Solutions
+91 98310 81531
USD HR Solutions – To Strive towards excellence with effort and integrity
From India, New Delhi
337S K Bandyopadhyay ( WB, Howrah)
CEO-USD HR Solutions
+91 98310 81531
USD HR Solutions – To Strive towards excellence with effort and integrity
From India, New Delhi
Dear Kriti,
For the gratuity calculation, every month is considered to be 26 days for organisations incorporated under the Gratuity Act 1972. Gratuity is paid for every 15 days for every completed year of service. In the last year of employment, if an employee serves for more than six months, it will be rounded off to the next number.
(Gratuity is dependent upon the total number of years served in the company and the last drawn salary.
Gratuity = A*B*15/26 :::::15 being wages for 15 days and 26 being the days of the month.)
For the gratuity calculation, every month is considered to be 26 days for organisations incorporated under the Gratuity Act 1972. Gratuity is paid for every 15 days for every completed year of service. In the last year of employment, if an employee serves for more than six months, it will be rounded off to the next number.
(Gratuity is dependent upon the total number of years served in the company and the last drawn salary.
Gratuity = A*B*15/26 :::::15 being wages for 15 days and 26 being the days of the month.)
Thanks for your replies but what I'm asking is suppose an employee is frequently on leaves in his Fifth year of service which will be his last year of working, it can be medical or any other leaves or LOP. So if I've to count the number of working days in the fifth year what base should I take, should we count the number of days for which his salary was made or 26 days format.
This problem arises when the employees are in their Fifth year of service and they leave the service in that fifth year itself. As far as I know all sanctioned leaves like EL,CL,SL, weekly off and holidays are counted for calculation of days, not clear on LOP's though. Correct me if I'm wrong somewhere.
Thanks
From India, undefined
This problem arises when the employees are in their Fifth year of service and they leave the service in that fifth year itself. As far as I know all sanctioned leaves like EL,CL,SL, weekly off and holidays are counted for calculation of days, not clear on LOP's though. Correct me if I'm wrong somewhere.
Thanks
From India, undefined
I think you are seeing this the wrong way.
The employee must be employed without a break in service. If that is established, then how many days he actually worked and how many days of leave he took, and whether it was a 5 day week or 6 day week is immaterial. As long as there was no service break (and he could even be on leave without pay, it will still not be a service break), he is entitled to gratuity for that year also.
The other thing is that the SC order says that in computation of Gratuity, you need to work out the daily wage rate by dividing the monthly salary by 26 and then multiplying it by 15 and the number of years worked.
From India, Mumbai
The employee must be employed without a break in service. If that is established, then how many days he actually worked and how many days of leave he took, and whether it was a 5 day week or 6 day week is immaterial. As long as there was no service break (and he could even be on leave without pay, it will still not be a service break), he is entitled to gratuity for that year also.
The other thing is that the SC order says that in computation of Gratuity, you need to work out the daily wage rate by dividing the monthly salary by 26 and then multiplying it by 15 and the number of years worked.
From India, Mumbai
Thanks for the inputs to seniors. One more thing, is an employee eligible for gratuity after completion of 4.5 yrs or he has to completer full five years.
From India, undefined
From India, undefined
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