5 years and 10 years and above = 30 days Employees with the period of service as on March 31, 2012> 1 year and The eligible numbers of days are defined as below:ġ. Amount payable for frozen differential number of days as on March 31, 2012, at the salary drawn as on March 31, 2012, for the completed years of service till MaFrozen differential number of days is defined as the difference between eligible number of days as per old rules and 15 days.Gratuity payable as per Payment of Gratuity Act at 15 days for every completed year of service at the last drawn salary and.An employee who has not completed 5 years of service at the time of separation but has a minimum completed period of service of 365 days as on March 31, 2012, will be paid gratuity only for the completed period of service till March 31, 2012, at the salary drawn on March 31, 2012.Įmployees on the rolls of the company as on March 31, 2012, and have completed a minimum of 365 days of service with the company as on March 31, 2012, the calculation of gratuity amount upon separation from the company is the sum of:
The eligibility details of covered employees who have joined on or after April 1, 2012, will be as per the Payment of Gratuity Act, 1972 (the "Act"). However, allowances like bonus, commission, HRA, overtime or other allowances are not to be considered for calculations. Wages shall consist of basic plus dearness allowance (DA), as per last drawn salary.
In the last year of service, if the employee has completed more than 6 months, it will be treated as full year for the purpose of gratuity. Gratuity is payable 15 days wages for every year of completed service. In case of death and disablement, the condition of minimum 5 years’ service is not applicable. Normally, gratuity is payable only after an employee completes 5 years of continuous service. Gratuity is payable to a person on (a) resignation (b) termination on account of death or disablement due to accident or disease (c) retirement (d) death. Gratuity is reward for good, efficient and faithful service rendered for a considerable period. However, under Gratuity Act, gratuity is payable even to an employee who resigns after completing at least 5 years of service.
It is basically a retirement benefit to an employee, so she / he can live life comfortably after retirement. As per Payment of Gratuity Act, 1972, gratuity is a lump sum payment to employee when she / he retires or leaves service.
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