A gratuity fund is a retirement benefits scheme provided to employees in India. It is a lump sum amount paid to an employee at the end of their employment tenure after continuous 5 years of service.
How to calculate gratuity?Gratuity = (15*last drawn salary*work period)/26
Here,
Last drawn salary is the basic salary plus dearness allowance.
26 is the working days of a month.
Work period is the number of continuous years of service.
15 is the 15 days' salary for the month
Your Feedback Matters! How was this Answer?
Shifting, House?
✔
Lowest Price Quote✔
Safe Relocation✔
Professional Labour✔
Timely Pickup & Delivery
Intercity Shifting-Upto 25% Off
Check Prices
Intracity Shifting-Upto 25% Off
Check Prices
City Tempo-Upto 50% Off
Book Now
Hey there,
Don’t we all love some appreciation for our hard work? I surely do and what better way to acknowledge your hard work than with some extra pay. I believe rewards are a great driving force towards hard work and productivity along with a good working environment. And gratuity is a form of reward that an employer gives to his/her employee in order to acknowledge and appreciate their hard work and services towards the company in the form of cash. This is what is gratuity fund. But there are certain rules under which an employee gets a gratuity fund. I will be explaining everything to you ahead of.
What is a Gratuity Fund in Salary?Gratuity in salary is the amount paid under the Payment of Gratuity Act 1972 to an employee. It is a component of an employee’s gross salary.
But an employee can receive a gratuity fund from an organisation only after he/she completes 5 or more years in the organisation.
Eligibility criteria to receive GratuityThe following category of employees are eligible for receiving gratuity fund:
The employees who are eligible for superannuation
The employees who have worked for an organisation for at least 5 years and then have resigned
The employees who have retired from work.
The employees who suffer from a disability or have passed away due to an accident or an illness.
The employers use a very simple formula to calculate the gratuity fund for an employee which is;
Gratuity Fund= YxSx15/26
Here, Y refers to the number of years an employee has worked in a company,
and S refers to the amount of salary last drawn by the employee including DA amount.
I hope my explanation of what is gratuity fund was helpful to you.
Invest your Gratuity on buying your dream home with Home Loans beginning at 6.5% interest at NoBroker. Pay all your utility bills through NoBroker from the comfort of your home and earn exciting rewards. Read More: How to Check Gratuity Amount? How to Apply Gratuity? Is Gratuity Taxable in India?Your Feedback Matters! How was this Answer?
Shifting, House?
✔
Lowest Price Quote✔
Safe Relocation✔
Professional Labour✔
Timely Pickup & Delivery
Intercity Shifting-Upto 25% Off
Check Prices
Intracity Shifting-Upto 25% Off
Check Prices
City Tempo-Upto 50% Off
Book Now
Authors Of The Question
What is Gratuity Fund?
Sia Iyer
1039 Views
2 Answers
2 Year
2022-04-25T21:49:21+00:00 2022-04-25T21:49:22+00:00Comment
Share