Have You Received Your Gratuity Payment Yet?
Most of you
guys must be thinking what exactly the “Gratuity Payment” is about and what it
has to do with them. Gratuity payment is
an amount of money that you receive by your employer in return of the service
you have provided to the company. You may relate it with the retirement benefit
/bonus and the social security benefit that you receive by the company when you
are retired or leave the company.
Here are
some questions that you are desperately waiting to be answered:
- · Who are eligible for “Gratuity Payment”?
Answer- Any employee who has been working for
the same company for minimum 5 years is eligible to receive “Gratuity Payment”.
- Gratuity is for private or Government sector?
receives “Gratuity Payment” and it is tax free.
- EPF or Gratuity..which one is better ?
Answer- If you are wondering how it is
different from your Employees'
Provident Fund then you must know that “Gratuity Payment” doesn’t work like
EPF. In EPF, portion of your salary is accumulated in your EPF but In “Gratuity
“not a single rupee from your salary is going anywhere. It’s more than a salary
you receive for your service.
- Who pays you “Gratuity money”?
Answer- It is the employer who pays it to the
employees. The money either comes from the employer’s fund or life insurance
firm tied with the Company.
- What is Gratuity calculator and how to use it?
Answer- Gratuity consists of number so in order to calculate
it; you need the Gratuity calculator or formula. The formula differs from one
employee to another either covered under the gratuity act or not. Gratuity
offers tax concession but it is taxable if it exceeds the Gratuity formula.
- Formula is as follows for gratuity payment for employees who are covered/ not covered under gratuity act :
- · Formula for gratuity payment for employees who are covered under gratuity act :
Gratuity =
No. of years * Last drawn salary of 15 days=
No. of years * 15/26*monthly salary
- · Formula for gratuity payment for employees who are NOT
covered under gratuity act :
Gratuity = One day Salary * 15* length of service
= Average salary of last 10 months/30) * 15 * completed years
= Average Salary of last 10 months * Completed years * 15/30
= Average Salary of Last 10 months * completed years *1 /2
=Half of the 10 month average salary * Completed years
