Gratuity Calculation
11 months ago
Sir, I want to know that i worked in my last organization for 6 years. In last year they have given me salary slip in that my basic is showing 16000 and they are including gratuity (4.81% of my total Gross Salary) in my gross salary. My gross salary was 27500/- and they are showing gratuity 1323/- in salary slip but at the time of Full & final settlement they are given (4.81% of my basic salary).is it correct?
A.Dear Client,
So far your query is concerned, the amount of gratuity disbursed by your Ex-employer, prima facie appears to be not correct at all.
Gratuity payable to an employee by his employer for continuous service of more than 5 years on his discharge, resignation, retirement etc to acknowledge the gratuitous service rendered or contributed by him for years for the growth of the establishment/Company and such a right to gratuity is guaranteed under Payment of Gratuity Act, 1972. So it cannot be a part or component of salary or wages and not eligible for deduction at any ratio from the monthly salary/wages of any employee/worker at all.
Under Sec.4 of the Payment of Gratuity Act, an employee is eligible for gratuity on completion of 5 years of continuous service @ 15 days wages/salary for every completed year of service in the establishment. In case of monthly salaried employees, the 15 days salary shall be computed by dividing his last drawn salary by 26 days and multiplying the quotient by 15.
In view of the above proposition of law, It is absurd to note from your query that a fraction of salary @4.81% is being deducted from your salary treating as gratuity and settled your full and final settlement which apparently appears to be a violation of standing provision of well-defined statute/Act applicable to all commercial or non-commercial establishments.
You may reach out to concerned office of Labour Commissioner who is Controlling Authority under P G Act to verify the computation of your gratuity amount payable by your ex-employer and to obtain appropriate reliefs in the matter.
So far your query is concerned, the amount of gratuity disbursed by your Ex-employer, prima facie appears to be not correct at all.
Gratuity payable to an employee by his employer for continuous service of more than 5 years on his discharge, resignation, retirement etc to acknowledge the gratuitous service rendered or contributed by him for years for the growth of the establishment/Company and such a right to gratuity is guaranteed under Payment of Gratuity Act, 1972. So it cannot be a part or component of salary or wages and not eligible for deduction at any ratio from the monthly salary/wages of any employee/worker at all.
Under Sec.4 of the Payment of Gratuity Act, an employee is eligible for gratuity on completion of 5 years of continuous service @ 15 days wages/salary for every completed year of service in the establishment. In case of monthly salaried employees, the 15 days salary shall be computed by dividing his last drawn salary by 26 days and multiplying the quotient by 15.
In view of the above proposition of law, It is absurd to note from your query that a fraction of salary @4.81% is being deducted from your salary treating as gratuity and settled your full and final settlement which apparently appears to be a violation of standing provision of well-defined statute/Act applicable to all commercial or non-commercial establishments.
You may reach out to concerned office of Labour Commissioner who is Controlling Authority under P G Act to verify the computation of your gratuity amount payable by your ex-employer and to obtain appropriate reliefs in the matter.
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A.Hello,
As per the infromation you have given it is advisabl to you reach out to an CA for better clarity.
As per the infromation you have given it is advisabl to you reach out to an CA for better clarity.
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