# Know when you get the right to gratuity, this is the right way of calculation

## Gratuity Calculation: The amount of gratuity is paid after the employees retire, resign or are fired.

Gratuity Calculation : If you are working in any company then you must have known about gratuity and when you become entitled to it. If you do not know, then we tell you when and in how much time you become entitled to gratuity. Let us tell you that gratuity is a reward received by an employee from his company, which you can also call a gift. A small part of the gratuity is deducted from the salary of the employee, but a large part is given by the company.

Let us tell you that if you work in a company for 5 consecutive years, then you are considered entitled to gratuity. According to the Gratuity Act 1972, you will be entitled to gratuity on completion of 5 consecutive years in a company. The amount of gratuity you will get depends on the current salary and the total tenure of the job. The amount of gratuity is paid after the employees retire, resign or are fired.

This is how gratuity is calculated

There is a direct way to calculate gratuity â€“ eg â€“ (last salary) x (number of years worked in the company) x (15/26). Last salary means the average of your last 10 months salary. Basic salary, dearness allowance and commission are included in this salary. Due to 4 days of Sunday being week off in the month, 26 days are counted and gratuity is calculated on the basis of 15 days.

Understand in detail Gratuity Calculation

If you worked in a company for 20 years. Your final salary is Rs 55000. In such a situation, after calculating (55000) x (20) x (15/26) according to the formula, the total amount will come out to Rs 6,34,615. After this, this amount will be provided to you by the company in the form of gratuity. If the company wants, you can also pay more than the amount of gratuity made on the basis of the prescribed formula, but according to the rules, gratuity cannot be given more than Rs 20 lakh.

In this case the calculation is different

When the company or institution is not registered under the Gratuity Act, then the employees are not covered under the Gratuity Act. But in such a situation, if the company wants, it can give gratuity to the employee, but in such a situation the formula for fixing gratuity becomes different. In such a situation, the amount of gratuity will be equal to half a month’s salary for every year. But the number of working days in a month will not be considered as 26 but 30 days.

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