The central government can announce changes in gratuity rules to the people doing jobs. The government is preparing that gratuity will be available for every day of work. After this decision of the government, crores of employees will get relief.
new Delhi. The central government can make a big announcement for the employed people across the country. Actually, the central government is in the process of repeating the 5-year condition for gratuity to 1 year. Apart from this, provision can also be brought to give gratuity to those working on fixed term. After this change, it will not be necessary to work 5 years in a company for gratuity. The government is preparing that gratuity will be available for every day of work.
Those with fixed term will also get the benefit of gratuity. However, it is not yet decided how much time the central government will take in its announcement. But, after this decision of the government, crores of employees will get relief.
In easy language, if an employee working for many years continuously in a company, the amount of money he gets apart from salary, pension and provident fund (PF- Provident Fund) is called gratuity. A small part of it is deducted from the salary of the employee, but the company gives a large part of gratuity on its behalf. In a way, it is like a long term benefit of the company.
Who pays gratuity?
In any company, gratuity is given to the employees working for a fixed time. According to the current rules, to be entitled to gratuity, an employee has to work in the same company for at least 5 years. There is talk of reducing the same time limit from 5 years to 1 year in media reports. According to the Gratuity Act, employees of a company that has 10 or more employees get the benefit of gratuity. The company pays the gratuity.
How is gratuity calculated according to the current rules?
The mathematics of gratuity is a bit complicated. But don’t worry. We explain it to you in easy language also. Suppose an employee worked in the same company for 30 years. The basic salary and dearness allowances in the employee’s last salary (basic salary + Dearness Allowances) together makes a total of 50 thousand rupees. One thing you need to know is that gratuity is calculated on 26 days basis instead of 30 days in a month. Because the remaining four days are considered as a holiday.
Now we will divide this 50 thousand rupees from 26. The amount that will come out after the part will be Rs 1923.07. Now we will multiply the total years of employee’s service by 15. Actually, gratuity is calculated on the basis of 15 days in a year. In this case, if you multiply it by 15 over 30 years, the result will be 450. Now we will multiply this 450 by 1923.07. The total amount after this multiplication will be 8,65,381. In this way, on the basis of basic salary and dearness allowance of an employee for 30 years, a total gratuity of Rs 8 lakh 65 thousand 381 will be given.
