What is Gratuity?
It is an amount that is paid by an employer to his/her employee in return of the services given by him/her to the company. However, the benefit of gratuity is offered to those employees who have been associated with the company for a minimum of five years. In this way, gratuity can be perceived as a gesture of gratitude by a company towards its employees against the services.
🔸The formula to Calculate Gratuity
The amount of gratuity also depends upon the years for which an individual has served a company and his/her last drawn income.
If, N = Years (number) x that one serves in a company
B = Last drawn salary (basic) with DA
So the
Gratuity = N*B*15 / 26
Source:- PolicyBazaar, Payment of Gratuity Act, 1972
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