Gratuity is a benefit that is given to the employee by the employer at the time of leaving the job or completing the job. The calculation of gratuity is not very complicated.
Gratuity is the amount that the employer company gives to the employee on completion of 5 years of service.
In such a situation, after 5 years of service, the basic salary and dearness allowance of the last month for each year are added and multiplied by 15.
After this, the amount of your gratuity is calculated by dividing the total service years and the amount received by 26.
The formula for calculating gratuity
If someone wants to know the formula for calculating gratuity in one line, then you can calculate gratuity from [(basic salary of last month + dearness allowance) x 15 x years of service] / 26.
How much gratuity will be given
For example, if you worked in a company for 5 years and 2 months, then your service will be considered as 5 years only. Suppose your last basic salary during this period was Rs 26 thousand.
On this, you used to get a 13 thousand dearness allowance. To calculate the gratuity (Employee Gratuity), first, take the sum of 26 thousand and 13 thousand. On adding this, this figure became 39 thousand.
Now multiply this amount by 15, then the total amount becomes Rs 5.85 lakh. Now multiply it by the total years of service i.e. 5, this calculation will become 2,925,000.
Finally, divide it by 26. The amount obtained after division is Rs 112,500. This is your actual gratuity, which you will get when you resign from the company.
What is gratuity
Gratuity is a gift given by your employer to you at the time of farewell in return for your many years of service.
Gratuity is a beneficial scheme that is part of the benefits given at the time of retirement and is given to the employee by the employer at the time of leaving the job or completing the job.
When can the gratuity be received
Gratuity is given to every employee who has worked continuously for 4 years, 10 months, and 11 days before leaving his job or retiring.
The job of every such employee is considered as 5 years of continuous service. According to the rule, any employee is considered entitled to gratuity only after 5 years of service.
So remember if you have a habit of changing jobs every year or two then you will never get the amount of gratuity.