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Gratuity Calculation

Amit Bhatkar (Service) (457 Points)

01 January 2009

Hi All,

My query is regarding the calculation of gratuity for non-govt employee.

As I learnt for non govt employee working more than 05 years in same organization , gratuity calculation will be

= Last drawn salary x 15/26 x completed years of service

For employee who completed more than 12 years, does the formula changes to whole salary ?

Whether the 3.50 LACS slab is only for taxability purpose ?

Please advise

Amit

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6 Replies

Nikita Khandelwal (Student) (86 Points)
Replied 01 January 2009

hey buddy

a/c to me the formula for the thing u said above is

15/26* last drawn salary * completed years of service or part thereof in excess of 6 months

where salary = basic salary+ DA (whether forming part or not)

and that too is true only if the employee is covered under payment of gratuity act

if the employee isnt covered under payment of gratuity act

then the calculation is

1/2* Average monthly Salary * Completed Years of Service

Salary = Basic Salary + DA (if terms so provide) + Commission (based on fixed %tage of t/o)

Average Monthly Salary= average salary of last 10 months immediately preceeding the month of retirement....

i hope now its a bit clear to u

moreover the period of service once is qualified i.e. 5 years of continuous service doesnt make any changes in calculation of exempted gratuity

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Nikita Khandelwal (Student) (86 Points)
Replied 01 January 2009

Hey Buddy Actually the formula u hav quoted is the formula for calculating the amount of gratuity exempt from tax

it doesnt calculate the gratuity to be received by the employee

the gratuity amount to be received by employee is calculated on the basis of the terms & conditions of the employment

Rahul Poddar (CHARTERED ACCOUNTANTS) (998 Points)
Replied 29 September 2009

I am providing herewith the calculation of gratuity

Attached File : 51 gratuity calculator.xls downloaded: 2119 times

1 Like

Abhishek Nanda (accountant) (29 Points)
Replied 20 November 2009

thanks its very nice and very helpful for convenient work

Regards

Abhishek Nanda

Gaurav (M) (21 Points)
Replied 20 July 2012

Thanks everyone for posting your views on this discussion.

One question - If a person has completed 4 years 9 months in an organization, will he be eligible to receive gratuity? How's an year calculated for Gratuity?

Thanks

Gaurav

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prabu (Assistant Consultant) (22 Points)
Replied 08 July 2013

hello team,

Need clarification on my case. my Gratutity joining date is 01.08.2006 and i have been transfered to same group company wef 01.11.2010. i.e i have service for 4.3 years.

my query is, the gratuity will be continuing to new company and considered total 7 year of my service or only 2.8 years in new same group company.

Thanks in advance. please clarify my query.

Regards

Prabu