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Calculation of Gratuity

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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

Example

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

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