Gratuity Rules: If an employee works for more than 5 years in the government or private sector, then in such a situation he gets the benefit of gratuity. This amount is received by the employee in case of retirement or leaving the job.
Gratuity money is deducted from the salary of every employee. According to the Gratuity Act 1972, if a person has not worked continuously for 5 years in his company and is leaving the job, then he is not entitled to the amount of gratuity. But there are some special circumstances when even without completing the period of 5 years, an employee can get the amount of gratuity. Let’s know about this rule.
What is rule?
Under Gratuity Section 1972, if you want to take advantage of the full amount of Gratuity, then you must have worked for at least 5 years in the company. But if an employee dies due to an accident, then in such a situation his family will get the benefit of the amount of gratuity. On the other hand, if an employee becomes disabled in an accident and is unable to work again, then he can avail the amount of gratuity even without completing the period of 5 years. While joining the job, the company gives Form F to every employee to fill. After this you become eligible to claim gratuity.
What is Gratuity?
A part of the salary of every employee is deducted for Gratuity and Employees Provident Fund Organization. For gratuity, a small part has to be given to the employee and a large part to the employer. When the employee works continuously for 5 years in a company, then he becomes entitled to take this gratuity. When the employee retires or leaves the company, then this gratuity money has to be given to the employee of the company.
What is the formula of Gratuity?
Let us tell you that the formula of gratuity is the last salary received by the employee x the number of days worked in the company x (15/26). If you are getting the benefit of gratuity after working for less than 1 year, then you will get double the amount of basic salary as gratuity. At the same time, up to 6 times of the basic salary is available on the job for 1 to 5 years. On the other hand, for more than 20 years, you can get gratuity amount up to 33 times of the basic salary.
