Are you an employee from anywhere and you are working in a company for at least 5 or more years that means you are now eligible for Gratuity if you want to know about Gratuity Formula, rules of gratuity in India and how How to Calculate Gratuity Amount in India , then you are at the right place in this blog we will cover for you.
What is Gratuity Amount in India, What is the Govt Rules of Gratuity Amount, Gratuity Formula explanation, gratuity calculation formula, How to Calculate Gratuity Amount in India, Gratuity Calculator in India, What is Gratuity in India?, Who is eligible for Gratuity in India?, How is Gratuity amount calculated in India?, Is there a maximum limit for Gratuity in India?, When is Gratuity paid in India?
What is Gratuity Amount in India
In India, gratuity is a lump sum payment made by an employer to an employee as a token of appreciation for the employee’s long and continuous service with the company. It is governed by the Payment of Gratuity Act, 1972, and is mandatory for companies with more than 10 employees.
What is the Govt Rules of Gratuity Amount
As per the Govt. act, gratuity is payable to an employee if he/she has completed a minimum of 5 years of continuous service with the company. The gratuity amount is calculated as 15 days’ wages for every completed year of service, subject to a maximum limit of Rs. 20 lakh.
Gratuity Formula explanation
The calculation of gratuity is based on the employee’s last drawn salary and the number of years of service completed with the company. The formula for calculating gratuity in India is as follows:
Gratuity = (15 * last drawn salary * number of years of service) / 26
gratuity calculation formula
Here, last drawn salary refers to the employee’s basic salary, dearness allowance (DA), and commission, if any. The factor 15/26 is used to calculate the daily wage of the employee, and the factor 26 is used to assume 26 working days in a month.
It is important to note that gratuity is a statutory benefit in India and is separate from other retirement benefits such as provident fund and pension.
How to Calculate Gratuity Amount in India Gratuity Calculator For You
this is the Gratuity calculator where you need to fill the required box.
Gratuity Calculator in India
FAQ :Gratuity Amount in India
Q1.: What is Gratuity in India?
Gratuity is a monetary benefit provided by an employer to an employee as a token of appreciation for long-term service.
Q2.: Who is eligible for Gratuity in India?
An employee who has completed 5 years of continuous service with an organization is eligible for Gratuity.
Q3.: How is Gratuity amount calculated in India?
The Gratuity amount is calculated based on the employee’s last drawn salary and the number of years of service completed.
Q4.:Is there a maximum limit for Gratuity in India?
Yes, the maximum Gratuity amount that can be paid to an employee in India is currently capped at Rs. 20 lakhs.
Q5.:When is Gratuity paid in India?
Gratuity is usually paid to an employee at the time of retirement, resignation, or termination, or in the event of their death.
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