Gratuity Calculation: What will be your gratuity for Rs 39,000, Rs 59,000, and Rs 66,000 last-drawn basic salary after 7 years and 7 months of service?

The number of years and the last-drawn basic salary of an employee are used to calculate the gratuity amount. Gratuity is a token of appreciation from an employer to an employee for their long-term service, usually after a minimum of 5 years of service. To your surprise, any service period of 6 months or more is rounded up to a full year. Let's calculate the gratuity amount for employees with last-drawn basic salaries of Rs 39,000, Rs 59,000, and Rs 66,000 last-drawn basic salary after 7 years and 7 months of service.

When do you qualify for gratuity benefits?

Gratuity is payable in the following cases:

• On retirement
• On resignation after 5 years of continuous service
• In case of death or disability due to accident or illness
• Upon superannuation (reaching the designated retirement age)

How is gratuity amount calculated?

The number of years and the last-drawn basic salary of an employee are used to calculate the gratuity amount.

Can a company opt out of the Payment of Gratuity Act?

If a company falls under the Payment of Gratuity Act of 1972, it cannot count itself out. 

What is formula to calculate gratuity?

(Last Drawn Salary x Number of Years of Service) X 15/26
Here, 15 refers to 15 days’ wages per year, and 26 refers to 30 days in a month, excluding Sundays.

Is it compulsory to complete five years of continuous service to apply for gratuity?

Yes, it is compulsory to complete five years of continuous service to apply for gratuity. 

What will be your gratuity on a Rs 39,000 basic salary for 7.7 years of service?

Let’s calculate gratuity for an employee with a basic salary of Rs 39,000, 7 years, and 7 months of service (rounded to 8 years).
Gratuity = (39,000 × 8 × 15) ÷ 26
Gratuity = Rs 1,80,000

What will be your gratuity on a Rs 59,000 basic salary for 7.7 years of service?

Let’s calculate gratuity for an employee with a basic salary of Rs 59,000, 7 years, and 7 months of service (rounded to 8 years).
Gratuity = (59,000 × 8 × 15) ÷ 26
Gratuity = Rs 2,72,307

What will be your gratuity on a Rs 66,000 basic salary for 7.7 years of service?

Let’s calculate gratuity for an employee with a basic salary of Rs 66,000, 7 years, and 7 months of service (rounded to 8 years).
Gratuity = (66,000 × 8 × 15) ÷ 26
Gratuity = Rs 3,04,615

Also Read: Rs 5,000 SIP Vs Rs 5,00,000 Lump Sum: Which can generate a higher corpus in 35 years?