Calculation of Gratuity
To calculate how much gratuity is payable, the Act has divided non-government employees into two categories – Employees who come under this Act and employees who are not covered under the Act.
1. Employees covered under the Act 1972
Gratuity Amount = (15 X Last Drawn Salary X Number of Completed Years of Services)/26
Example
Let us Assume Mr.-X’s Last Drawn Salary was ₹77000. If he Worked for 12 Years 7 months, Then his Gratuity Will be – (15 X 77000 X 13)/26 = ₹ 577500
2. Employees not covered under the Act 1972
Gratuity Amount = (15 X Last Drawn Salary X Number of Completed Years of Services)/30
Let us Assume Mr.-X’s Last Drawn Salary was ₹77000. If he Worked for 13 Years, Then his
Gratuity Will be – (15 X 77000 X 13)/30 = ₹ 500500
