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Home FINANCE Gratuity Rule: Are the gratuity rules different for government and private jobs?

Gratuity Rule: Are the gratuity rules different for government and private jobs?

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New Delhi. Companies give the gift of gratuity to their honest employees . Employees get the benefit of gratuity when they are employed in an organization for a specified period of time.

If he leaves or changes his job before the stipulated time period, he does not get the benefit. In such a situation, the question often arises whether the gratuity rules are different for government and private jobs ? Let us tell you that it is not so. Even if you are a government employee or doing a private job, the rules of gratuity are the same for you.

This month, Allahabad Court gave an order regarding gratuity that if the employee chooses retirement after 60 years or takes retirement at 62 years, he will get the benefit of gratuity in both the forms.

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Actually, many companies did not provide the benefit of gratuity to the employee because the employee had selected the option of retirement at 62 years.

What is gratuity?

Gratuity is given by the company to its employees. When an employee works in the same organization for 5 years, he gets gratuity as a mark of gratitude. The benefit of gratuity is available to all government employees as well as private employees.

The Payment and Gratuity Act is applicable on all the companies, factories, mines, oil fields, ports and railways of the country. At the same time, even if more than 10 people work in a company or shop, they still get the benefit of gratuity.

When is gratuity received?

Employees become eligible to receive gratuity after working in any organization for 5 years. But in some cases this time limit is less. According to Section-2A of the Gratuity Act, if an employee works in an underground mine, then he can avail the benefit of gratuity after completion of 4 consecutive years and 190 days.

Whereas in other organizations, gratuity is given only after 4 years 240 days (i.e. 4 years 8 months). The benefit of gratuity is available after leaving the job or after retirement. You cannot take advantage of this while working. You get this benefit when you resign from the company.

Let us tell you that notice period is also counted in gratuity. Actually, notice period also comes under ‘continuous service‘.

How is gratuity calculated?

You can calculate gratuity very easily. You can easily calculate gratuity by adding basic salary and dearness allowance x (15/26) x (number of years worked).

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For example, your basic salary and dearness allowance together is Rs 35000 and you have worked in the company for 7 years, then the total gratuity you will get is 35000 x (15/26) x 7 = Rs 1,41,346.

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