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Gratuity Calculation

Calculation of the Amount of Gratuity [Section 4]:-

  • Monthly Salaried Employee

    Gratuity = Last drawn wages × 15/26 × Completed years of Service (including a part of year in excess of six months)

    Note:
    Wages = Last Drawn
    Month = Period of 26 Days
    15 days wages = Last drawn wages × 15/26

  • Piece Rated Employee

    Gratuity = Last drawn wages × 15/26 × Completed years of Service (including a part of year in excess of six months)

    Note:
    Last drawn Wages = Total wages received during three months immediately preceding termination /Days actually worked
    Last drawn wages shall not include overtime wages.

  • Employee of a Seasonal Establishment.

    Employee of seasonal establishment shall be paid gratuity at the rate of 7 days wages for each season.
Gratuity in case of disabled employee
If an worker or employee becomes disabled due to a disease or an accident and not be able to perform the task which he/she was performing before such disease or accident, but is re-employed on some other task/job on reduced wages, he/she shall be paid gratuity as follows:

1. For the period preceding the disablement

On the basis of last drawn wages by the employee at the time of disablement.

2. For the period subsequent to disablement
On the basis of last drawn reduced wages by the employee at the time of termination of employment.