Gratuity Formula 2023: If you have worked in a company for a certain period, then you will be entitled to get Gratuity. Most of the employees change jobs, then they expect that they will get gratuity from the company.
It is important for us to know what kind of standards have been set by the government to get gratuity. How is the amount of gratuity decided and after working for how many years you get gratuity. Actually, gratuity is the reward received by the company from an employee. If the employee fulfills certain conditions of the job, then the payment of gratuity will be guaranteed to him under a prescribed formula.
When do you get gratuity
A small part of gratuity is deducted from the salary of the employee, but the major part is given by the company. According to the current rule, if a person works in a company for at least 5 years, then he becomes entitled to gratuity. That is, if you leave the company after 5 years, you will get gratuity.
According to the Payment of Gratuity Act, 1972, its benefit is available to every employee of a company where at least 10 employees work daily in a year. If the employee changes jobs, retires or leaves the job for any reason but he fulfills the rules of gratuity, then he gets the benefit of gratuity. On the other hand, if a company or organization does not come under the purview of the Gratuity Act, but if it wishes, it can give the benefit of gratuity to its employees.
According to the formula of gratuity, if an employee works for more than six months, then his calculation will be done as one year. For example, if an employee works for 7 years and 8 months, then it will be considered as 8 years and on this basis the amount of gratuity will be made. On the other hand, if he works for 7 years and 3 months, then it will be considered as 7 years only.
How is the amount of Gratuity determined (Gratuity Formula 2023)
There is a fixed formula to calculate gratuity. Total gratuity amount = (last salary) x (15/26) x (number of years worked in the company). Suppose an employee worked in the same company for 20 years. The final salary of that employee is Rs 75000 (including basic salary and dearness allowance), then he will get around Rs 8.65 lakh as gratuity ((75000) x (15/26) x (20) = Rs 865385). In the formula for gratuity calculation, only 26 days are counted in every month, because it is believed that there are 4 days off. Whereas gratuity is calculated on the basis of 15 days in a year.
