Private sector employees will also get the option of gratuity transfer like PF. Gratuity will also be transferred like PF on change of job after the industry-union agrees on gratuity portability.
New Delhi. Like the Employees Provident Fund (EPF), now the Gratuity will also be transferred on changing jobs. According to sources, the government-union and the industry have agreed to change the existing gratuity structure and it will soon be included in the rules related to the Social Security Act.
According to a CNBC-Awaaz report, sources said that employees of the private sector will also get the option of gratuity transfer like PF . Gratuity will also be transferred like PF on change of job after the industry-union agrees on gratuity portability. Like PF, monthly gratuity contribution is also agreed upon.
According to sources, the proposal to make gratuity a part of CTC was also discussed in the labor ministry-union-industry meeting. These provisions will be included in the rule of the Social Security Code. According to sources, final notification on this is possible next month. However, the industry has not agreed to extend the working day for gratuity. That is, the industry has not agreed to the proposal to make the working day 15 days to 30 days for the gratuity.
What gratuity ( Gratuity )
Gratuity is a benefit paid under the Payment of Gratuity Act 1972. Gratuity is money paid by an employer to an employee for services rendered by him to the company. However, gratuity is paid only to the employee who has served the company for 5 years or more.
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Gratuity entitlement
- Retiring employees
- Employees working for a minimum period of 5 years or more with a single employer
- Dead or crippled employees due to illness or accident
Gratuity calculator
The formula for calculating gratuity is Gratuity = N * B * 15/26
Here N means the total year of working in a company. B stands for Last Basic Salary and DA. For example, suppose a person works in a company for 20 years and his last basic salary and DA amount is Rs 25,000, then his gratuity amount will be = 20 * 25,000 * 15/26 = Rs 2,88,461.54. .
