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What is gratuty?

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Anonymous

12y ago
Updated: 4/28/2022

Gratuity is an exgratia payment payable to an employee by the Company covered under Gratuity Act. On retirement, his total tenure of service i.e. no. of years is taken into consideration.For every 20 days of presentation, one day is taken. For one full month, 26 days are considered . The gratuity formula is as hereunder :-

No. of working days x no. of years x last drawn salary

Divided by 26 Days

There is also Group Gratuity Scheme offered by Life Insurance Cos. wherein employees of a company are covered under this scheme. Where apart from payment of gratuity,life coverage is an added benefit. And the Companies are lesser burdened by offering the burdens of gratuity payment on insurance cos. by paying yearly premiums.

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Wiki User

12y ago

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