Seeking Help In Calculating Gratuity - DOC Download

"What is bonus salary? And non-saturated and saturated bonus??"

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What is bonus salary? And what are non-saturated and saturated bonuses?

Dear Mr. Sarkar / Sonali,

Gratuity insurance policy is very much mandatory. If your company's salary structure does not have "DA," then need not consider. All other extra allowances that you have mentioned in your post should not be counted for gratuity calculation.

Thanks,
Anand G

Dear Anand,

Gratuity insurance policy is not yet made mandatory. Please refer to Section 4 of the act on compulsory insurance.

4A. (1) With effect from such date as may be notified by the appropriate Government in this behalf, every employer, other than an employer or an establishment belonging to, or under the control of, the Central Government or a State Government, shall, subject to the provisions of sub-section (2), obtain insurance in the manner prescribed for their liability for payment towards gratuity under this Act from the Life Insurance Corporation of India established under the Life Insurance Corporation of India Act, 1956 (31 of 1956), or any other prescribed insurer. Provided that different dates may be appointed for different establishments or class of establishments or for different areas.

Please note that no such notifications have been issued so far.

For your reference, besides LIC, a few other insurance companies also offer such Group Gratuity Insurance Policies.

Sethupathy Excellent HR Services, Erode

Dear Mr. Sethupathy,

Thank you for your guidance. Could you please explain why there is a need for gratuity insurance? What are the benefits of gratuity insurance?