Hi,
In our establishment, we have started providing gratuity to our employees. More than 10 employees have completed 5 years of service. I kindly request suggestions on how to communicate these details to the management and employees. Your prompt response is appreciated.
Regards,
Saravanan M
From India, Madras
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In our establishment, we have started providing gratuity to our employees. More than 10 employees have completed 5 years of service. I kindly request suggestions on how to communicate these details to the management and employees. Your prompt response is appreciated.
Regards,
Saravanan M
From India, Madras
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Hi Saravanan,
We give gratuity to employees after completing 5 years of service in the organization. Gratuity is calculated based on 15 days' salary of the last month's salary drawn, considering Basic + DA. The maximum limit for gratuity is 3.5 lakh.
If a person is dismissed for fraud or theft, they are not eligible for gratuity, even if they have completed 5 years of service. However, this condition should have been specified in the offer letter.
The formula for calculating gratuity is as follows:
Formula:
(Basic + DA / 26) x 15 x Number of years of service
For example:
Basic = 3500
DA = 2000
Number of years = 7 years
Gratuity = (3500 + 2000 / 26) x 15 x 7
Gratuity = 22,211.54
I hope the information I have provided is useful to you.
Regards,
Amol
From India, Mumbai
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We give gratuity to employees after completing 5 years of service in the organization. Gratuity is calculated based on 15 days' salary of the last month's salary drawn, considering Basic + DA. The maximum limit for gratuity is 3.5 lakh.
If a person is dismissed for fraud or theft, they are not eligible for gratuity, even if they have completed 5 years of service. However, this condition should have been specified in the offer letter.
The formula for calculating gratuity is as follows:
Formula:
(Basic + DA / 26) x 15 x Number of years of service
For example:
Basic = 3500
DA = 2000
Number of years = 7 years
Gratuity = (3500 + 2000 / 26) x 15 x 7
Gratuity = 22,211.54
I hope the information I have provided is useful to you.
Regards,
Amol
From India, Mumbai
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Hi,
You can calculate the gratuity payable and all other details for all such employees and then present them to the management. The formula given by the other member is correct. Additionally, you have to calculate gratuity based on the last drawn salary.
Regards,
Neha
From India
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1You can calculate the gratuity payable and all other details for all such employees and then present them to the management. The formula given by the other member is correct. Additionally, you have to calculate gratuity based on the last drawn salary.
Regards,
Neha
From India
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Dear Amol, The gratuity payable ceiling has been increased from 3.5 to 10 Lakhs. (Ref. Payment of Gratuity (Amendment) Act, 2010 (No. 15 of 2010), dated 17-5-2010)
From India, Mumbai
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From India, Mumbai
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Dear Amol,
It is not correcting; it is just an update that you may not have come across. Everyone here is here to learn new things every day. Every day, some amendments are made that I may not know about unless a member updates me.
Happy learning.
From India, Mumbai
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It is not correcting; it is just an update that you may not have come across. Everyone here is here to learn new things every day. Every day, some amendments are made that I may not know about unless a member updates me.
Happy learning.
From India, Mumbai
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Hi : Talk to LIC of India they have a separate division for gratuity. They do a good job for getting a policy ready as well as managing the funds
From India, Mumbai
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From India, Mumbai
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Dear Sir, Gratuity is payable while leaving from service after completion of 5 years Service. You need not give to the persons working for more-than 5 years service. D.Gurumurthy HR/IR Consultant
From India, Hyderabad
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From India, Hyderabad
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Dear Amol Ji,
You mentioned that gratuity is given to employees after completing five years of service. Could you please clarify this for me? Are you providing gratuity to employees after they complete five years of service, even if they are still employed, or only when they leave the organization permanently? Gratuity should be paid only when an employee leaves the service permanently, not if they continue in service beyond five years. It should be paid only once at the end of the service period and not during the service after completing a five-year term. I have interpreted your statement literally and provided this explanation. If you are already following this practice, please disregard this message.
Thank you and regards,
From India, Pune
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You mentioned that gratuity is given to employees after completing five years of service. Could you please clarify this for me? Are you providing gratuity to employees after they complete five years of service, even if they are still employed, or only when they leave the organization permanently? Gratuity should be paid only when an employee leaves the service permanently, not if they continue in service beyond five years. It should be paid only once at the end of the service period and not during the service after completing a five-year term. I have interpreted your statement literally and provided this explanation. If you are already following this practice, please disregard this message.
Thank you and regards,
From India, Pune
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Hi,
A small confusion in your line, sorry. Actually, we started this year only to give gratuity to employees as per the Payment of Gratuity Act. I need to prepare the gratuity policy and submit it to management. Kindly clarify or provide any gratuity manual samples to prepare as soon as possible.
Keenly awaiting your reply.
Regards,
Saravanan.M
From India, Madras
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A small confusion in your line, sorry. Actually, we started this year only to give gratuity to employees as per the Payment of Gratuity Act. I need to prepare the gratuity policy and submit it to management. Kindly clarify or provide any gratuity manual samples to prepare as soon as possible.
Keenly awaiting your reply.
Regards,
Saravanan.M
From India, Madras
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Dear Saravanan Ji,
Gratuity is payable only when an employee's services are permanently terminated due to resignation, retrenchment, incapacity due to accidental injury, death, etc. While gratuity is payable after completion of 5 years of continuous service, this condition of 5 years of continuous service is not applicable if the employee dies while in service. Gratuity is payable in the event of death even if he has not completed five years of service.
For preparing a gratuity policy for your firm, you may please study similar policies of public sector undertakings like Food Corporation of India, nationalized banks, cooperative banks, etc. They have established policies that you may adopt with suitable changes. Some employers now resort to gratuity policies of Life Insurance Corporation of India. They pay a periodical premium to the LIC. When gratuity becomes payable to some employee, the LIC meets the liability. You may contact the nearest LIC office to get more details from them.
Thanks and regards,
From India, Pune
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Gratuity is payable only when an employee's services are permanently terminated due to resignation, retrenchment, incapacity due to accidental injury, death, etc. While gratuity is payable after completion of 5 years of continuous service, this condition of 5 years of continuous service is not applicable if the employee dies while in service. Gratuity is payable in the event of death even if he has not completed five years of service.
For preparing a gratuity policy for your firm, you may please study similar policies of public sector undertakings like Food Corporation of India, nationalized banks, cooperative banks, etc. They have established policies that you may adopt with suitable changes. Some employers now resort to gratuity policies of Life Insurance Corporation of India. They pay a periodical premium to the LIC. When gratuity becomes payable to some employee, the LIC meets the liability. You may contact the nearest LIC office to get more details from them.
Thanks and regards,
From India, Pune
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Payment of Gratuity Act, 1972 & The Rules.ppt
THE PAYMENT OF GRATUITY ACT 1972.doc