Gratuity calculation and components
7 months ago
i worked for NMIMS for 7 years till 10-dec-2016
gratuity was paid after 7 years of resignation on 01-sep-2023.
Formula was (basic pay+grade pay)*7/2
My contention is dearness allowance should be included
formula should be (basic pay+grade pay+dearness allowance)/26*15*7
A.Dear Client,
Under the Payment of Gratuity Act 1972, gratuity is calculated as under - Gratuity = Last drawn salary (basic salary + DA) * number of completed years of service * 15/26. For the calculation of gratuity, salary includes only Basic salary and Dearness Allowance (DA). There won't be any other components that will be considered for the calculation of gratuity. The employees of an organization who are not covered under the Payment of Gratuity Act 1972 are also eligible for the gratuity if qualify for the same, but the total number of days in a month will be considered 30. So, in the prevailing situation, when a discrepancy in the computation of gratuity appears on the face of record, you may escalate the matter before the Controlling Authority under P G Act, 1972 and the concerned Labour Commissioner for redressal of your grievance.
Under the Payment of Gratuity Act 1972, gratuity is calculated as under - Gratuity = Last drawn salary (basic salary + DA) * number of completed years of service * 15/26. For the calculation of gratuity, salary includes only Basic salary and Dearness Allowance (DA). There won't be any other components that will be considered for the calculation of gratuity. The employees of an organization who are not covered under the Payment of Gratuity Act 1972 are also eligible for the gratuity if qualify for the same, but the total number of days in a month will be considered 30. So, in the prevailing situation, when a discrepancy in the computation of gratuity appears on the face of record, you may escalate the matter before the Controlling Authority under P G Act, 1972 and the concerned Labour Commissioner for redressal of your grievance.
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A.Dear Client,
Gratuity calculations can vary depending on the terms of your employment contract and local labor laws. The inclusion of dearness allowance in the calculation of gratuity may depend on the specific rules and regulations applicable to your situation.
In many cases, dearness allowance is not included when calculating gratuity. Typically, gratuity is calculated based on your basic salary and dearness allowance may not be factored into this calculation. Instead, it is calculated based on a formula prescribed by the Payment of Gratuity Act, 1972, in India.
The standard formula for calculating gratuity under the Payment of Gratuity Act, 1972, is:
Gratuity = (Basic Salary + Dearness Allowance) × 15/26 × (Number of Years of Service)
In your case, if you believe that dearness allowance should be included in the calculation based on your employment contract or local regulations, you should consult with an employment attorney or legal expert in your jurisdiction. They can review your specific employment terms, the applicable laws, and advise you on the correct calculation of your gratuity.
Thank you.
Gratuity calculations can vary depending on the terms of your employment contract and local labor laws. The inclusion of dearness allowance in the calculation of gratuity may depend on the specific rules and regulations applicable to your situation.
In many cases, dearness allowance is not included when calculating gratuity. Typically, gratuity is calculated based on your basic salary and dearness allowance may not be factored into this calculation. Instead, it is calculated based on a formula prescribed by the Payment of Gratuity Act, 1972, in India.
The standard formula for calculating gratuity under the Payment of Gratuity Act, 1972, is:
Gratuity = (Basic Salary + Dearness Allowance) × 15/26 × (Number of Years of Service)
In your case, if you believe that dearness allowance should be included in the calculation based on your employment contract or local regulations, you should consult with an employment attorney or legal expert in your jurisdiction. They can review your specific employment terms, the applicable laws, and advise you on the correct calculation of your gratuity.
Thank you.
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