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Gratuity is a lump sum payment made by an employer to an employee as a token of gratitude. For this, it is necessary to work for at least 5 years.
After working for 5 years, one gets a gratuity amount on leaving or retiring. In case of death or accident due to any reason, the employee or nominee gets it.
Total Gratuity= Final Salary x 15/26 x number of years worked in the company
If your final salary including basic & dearness allowance is Rs 30000, then 30000 x 15/26 x 6 (no.of years worked) = Rs 1,03,846.
Gratuity calculation is based on 15 days in a year and 26 days of a month. In this, if the working period is more than 6 months, it is considered as 1 year.
First- Employees who come under the purview of the Payment Act 1972. Second- Those who do not fall under this Act. Both government & private come under this.