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    Gratuity

    Uploaded by

    Kaushik Jack
    Gratuity is a monetary amount paid by employers to employees in appreciation for their service. It is required under the Payment of Gratuity Act of 1972 after an employee has worked for at least 5 years. The amount is calculated based on years of service and last drawn salary, with a maximum of Rs. 10 lakhs imposed by law. Employers can provide a higher gratuity or ex-gratia amount voluntarily. To be eligible, employees must meet conditions like superannuation, resigning after 5 years of service, retirement, or disability/death due to work.

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    Gratuity

    Uploaded by

    Kaushik Jack
    21 views4 pages
    Gratuity is a monetary amount paid by employers to employees in appreciation for their service. It is required under the Payment of Gratuity Act of 1972 after an employee has worked for at least 5 years. The amount is calculated based on years of service and last drawn salary, with a maximum of Rs. 10 lakhs imposed by law. Employers can provide a higher gratuity or ex-gratia amount voluntarily. To be eligible, employees must meet conditions like superannuation, resigning after 5 years of service, retirement, or disability/death due to work.

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    Gratuity is a monetary amount paid by employers to employees in appreciation for their service. It is required under the Payment of Gratuity Act of 1972 after an employee has worked for at least 5 years. The amount is calculated based on years of service and last drawn salary, with a maximum of Rs. 10 lakhs imposed by law. Employers can provide a higher gratuity or ex-gratia amount voluntarily. To be eligible, employees must meet conditions like superannuation, resigning after 5 years of service, retirement, or disability/death due to work.

    Copyright:

    © All Rights Reserved
    Download as PPTX, PDF, TXT or read online from Scribd
    Download as pptx, pdf, or txt
    21 views4 pages

    Gratuity

    Uploaded by

    Kaushik Jack
    Gratuity is a monetary amount paid by employers to employees in appreciation for their service. It is required under the Payment of Gratuity Act of 1972 after an employee has worked for at least 5 years. The amount is calculated based on years of service and last drawn salary, with a maximum of Rs. 10 lakhs imposed by law. Employers can provide a higher gratuity or ex-gratia amount voluntarily. To be eligible, employees must meet conditions like superannuation, resigning after 5 years of service, retirement, or disability/death due to work.

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    I T Y

    T U
    R A
    G
    Gratuity is a lump sum amount paid by the employer to the employee as a token of
    appreciation for the services they have provided towards the company.

    Gratuity as a part of salary


    Gratuity is the monetary amount which is payable to the employee of an organization
    under the Payment of Gratuity Act 1972. This is mainly paid to the employee as a
    token of appreciation for his/her services towards the company. Gratuity payment is
    one of the several components that make up the gross salary of the employee.
    However, an employee is eligible to receive the gratuity amount only after they
    complete a period of 5 or more years with the company.

    The employer may either pay their employees the gratuity amount from their own
    account or opt for a general gratuity insurance plan with a service provider. The
    company then pays annual contributions to the service provider, and in return, the
    insurance company can pay the gratuity amount to the employee, by following the
    policy rules and regulations. The gratuity amount is totally paid by the employer
    without any contributions from the employee.
    Eligibility Criteria to Receive Gratuity.
    • They should be eligible for superannuation.
    • They resign after working for five years with a single employer.
    • They retire from work
    • They suffer disability or pass away due to accident or illness during their service.

    Calculation of gratuity.
    Gratuity Amount = Y x S x 15/26
    Where Y – Number of years worked in the organization,
    S – Last drawn salary including DA
    The employer is free to provide the employee higher gratuity, but according to the
    Gratuity Act, the amount cannot exceed Rs. 10 Lakhs. Anything above INR 10 lakhs, the
    amount is known is ex-gratia, which is a voluntary contribution and not compulsorily
    imposed by any law.
    To calculate the number of years for the gratuity calculation, anything above 6 months is
    rounded off to the next number and anything below 6 months will be rounded off to the
    previous number.
    THANK YOU.

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