The Act classifies the employees under two categories: The Payment of Gratuity Act, 1972, prescribes the rules and calculation of the Gratuity Amount. The Act also lists criteria for the organizations that fall under the purview of the Act. Namely, employees covered under the Act and employees not covered under the Act. Under these rules, there are two categories of employees. The Payment of Gratuity Act, 1972, prescribes rules for the calculation of gratuity. However, if the employee works for only 15 years and five months, the number of years of service will be 15 years. For example, if an employee works for 15 years seven months, the number of years of service will be 16 years. In the last year of employment, if the employee works for more than six months, it is rounded off to the next number. The number of months of service is significant in gratuity calculation. Ex-gratia is a voluntary contribution and not compulsorily imposed by law. The excess, if any, falls under ex-gratia. The gratuity amount cannot exceed INR 10 lakhs. In case of death or disability of the employee, even before completion of 5 years, the employee is eligible for gratuity. Employee must not have another full-time employer. The employee must work for at least five years in the company continuously. Under this Act, an employee has to fulfill specific criteria to be eligible for gratuity payment.
Payment of Gratuity Act, 1972 governs the gratuity and its payment rules.
The motive behind gratuity payments is to provide retirement benefits to the employees. The company pays it as a gratitude for his/her services to the company. Gratuity is the monetary benefit an employee receives in lumpsum by the company. Also, the calculator helps in long term financial planning to have a stress free retirement. The calculator returns the gratuity amount within seconds, and it is straightforward to use. These include last drawn monthly income, the number of years of service (including months) and dearness allowance. The gratuity calculator works on a formula that uses several inputs. It is a helpful tool for those employees who are planning to retire from their job. Gratuity calculator is a tool to estimate the gratuity amount one receives if they are planning to leave the job. Where Can One Invest the Lump Sum Gratuity Amount Received?.Which Organization is Eligible for Gratuity?.How Can a Gratuity Calculator Help You?.How to Use Scripbox’s Online Gratuity Calculator?.How to Calculate Gratuity in 2023 Using Formula?.
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