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News India Live, Digital Desk: Gratuity Calculation Rules: Whenever we start a job, our entire focus is on salary, work and holidays. But apart from our salary, there are some big benefits about which it is very important for us to know. These are the benefits Gratuity And BonusBoth of these are ‘rewards’ for your hard work and your loyalty towards the company, which is your right by law.
Many people consider these two to be the same or are confused about their rules. So let us understand in simple language today what these are and when and how much money you can get.
Gratuity: Reward for your ‘loyalty’
Gratuity is the amount that a company gives to its employee as a reward for his long service. This is a kind of ‘thank you’ gift.
Most important rules for gratuity:
- 5 years of service is mandatory: The biggest condition to get gratuity is that you have worked in the same company. 5 consecutive years Have worked till.
- More than 10 employees: This rule applies to all those companies where 10 or more employees work.
- When is it available?: You get this amount when you leave the job, retire, or unfortunately in the event of death or disability.
- When can I get it before 5 years?: If an employee dies or becomes disabled due to an accident, the rule of 5 years of service does not apply to him and his family gets the gratuity amount.
How much gratuity do you get? (Simple Calculation)
It has a fixed formula:
(Last Salary) x (15/26) x (Years in service)
- Last Salary: This includes your basic salary + dearness allowance (DA).
- Meaning of 15/26: 15 days salary based on 26 days work in a month (excluding 4 Sundays).
- Years of employment: If you have worked for more than 5 years and 6 months, it will be considered as 6 years.
Example: Suppose your last basic+DA salary was ₹50,000 and you worked for 7 years, then your gratuity will be:
(50,000) x (15/26) x 7 = ₹2,01,923
Bonus: Your share in the company’s ‘profits’
Bonus is the amount that the company shares a part of its profits with its employees. This is given in addition to your salary and is also known as ‘Diwali Bonus’.
Important rules for bonus:
- Must work for 30 days: To get the bonus you must have worked for at least 30 days in that financial year.
- More than 20 employees: This rule applies to all those companies where 20 or more employees work.
- Salary Range: Employees whose salary (Basic + DA) ₹21,000 per month they are legally entitled to the bonus.
How much bonus do you get?
- Minimum Bonus: Whether the company makes profit or loss, it has to pay its eligible employees their annual salary. 8.33% Bonus has to be given. This is approximately equal to one month’s salary.
- Maximum Bonus: If the company has good profits, it can earn maximum 20% Can give bonus up to.
Remember: Gratuity and bonus are not just a gift from the company, but your legal right. Next time you change jobs or retire, don’t forget to take these two big sums.