Gratuity Calculation Formula: When an employee works in a company for a long period, he gets a reward from the company. This reward is called gratuity. Under the Gratuity Act 1972, the company gives gratuity after working for a tenure of 5 years. We will tell you the formula to calculate gratuity in this article.
Gratuity Calculation Formula: When an employee works in a company for a period of more than 5 years, he gets gratuity from the company. Gratuity is a kind of reward. In such a situation, many employees have a question that how much amount will they get in gratuity?
In this article, we will tell you about the formula to calculate gratuity. On the basis of this formula, you can also easily know how much amount you will get in gratuity.
How is gratuity calculated?
Under the Gratuity Act 1972, a formula has been prepared to calculate gratuity. Under this formula, the basic salary of the employee and the duration of the job are multiplied by (15/26).
For example, if the basic salary of an employee is Rs 75,000 and he has been working in a company for 10 years, then he will get Rs 75000 x (10 years) x (15/26) i.e. Rs 4,32,692 in gratuity.
Sometimes the gratuity calculation is different
If a company is not registered under the Gratuity Act, then that company can voluntarily give gratuity to the employee. In such a situation, the calculation of gratuity becomes different. In this situation, the amount of gratuity is considered to be half of the salary.
Notice period is calculated
Many employees have a question whether the notice period is also calculated in the gratuity period. The answer is yes. According to the Gratuity Act 1972, notice period is also included in gratuity. This means that if an employee has worked for 4 years and 10 months and has served a notice period of 2 months, then he will also get the benefit of gratuity.
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