What is Gratuity Act?
Gratuity Act is the amount given to an employee on behalf of the institution or employer. An institution or employer must have an employee to work for at least five years. Usually, this amount is given when an employee leaves the job or is removed from the job or he retires. In the event of death of an employee due to any reason or leaving his job due to accident, he or his nominee gets the amount of gratuity.
The amount of gratuity is calculated under a certain formula. In fact, under the payment of Gratuity Act 1972, every employee of that institution gets more than 10 employees. If the employee change the job, retires or quits due to any reason, but he meets the rules of gratuity, he gets the benefits of gratuity act. For this a minimum service of five years is mandatory.
According to the bill, gratuity will be paid to the employee for five consecutive years of service at the end of the job. It will be on retirement, retirement or resignation, death or disability from accident or illness. However in the case of working journalists, It will be three years instead of five years
Gratuity Calculation Payment Rule
The central government has made a big change in the rules of gratuity payments of employees.
The central government has made a big change in the rules of gratuity payments of employees. As per the changed rules, provision for payment of gratuity has been made for fixed term employees. There will be no minimum service tenure for this. For the first time, an employee who is working for a specified period is given the right to social security like a regular employee.
Fixed term refers to the employees working on the contract base. During the introduction of the bill in the Lok Sabha, Lobor Minister Santosh Gangwar said on bringing fixed-term employment into the IR code, that the service conditions , salary, leave and social security of fixed-term employees will be the same as that of a regular employee. In addition, fixed-term employees have also been given the right to pro rata gratuity act.
How to Calculation Gratuity Calculator
These example will help you estimate how much gratuity you will get when you retire. Gratuity is paid if you have worked in a company for more than 5 years.
Currently, gratuity is calculated on the basis of a fixed formula. Standards have been set in this. Understand this calculation.
Total gratuity amount=(last salary)x(15/26)x(how many years worked in the company.
Les’s understand with example
#Example 1 Employees covered under the Act
Suppose someone worked in a company for 6 years 8 months. His basic salary while leaving the job was 15000 rupees a month. In such a situation, according to the formula, the amount of his gratuity will come out in this way – 15000x7x15/26=60577 rupees.
#Example 2 Employees not covered under the Act
If someone worked in the company for 6 years 8 months. His basic salary while leaving the job was 15000 rupees a month. This company does not come under the purview of the gratuity act. In such a situation according to the formula, the amount of gratuity will come out in this way.
15000x6x15/30= 45000 rupees (those not coming in a act will get 15,777 rupees less than the employees coming in the act.)
For Gratuity Calculator Click Here