Gratuity is a benefit provided by an employer to an employee in recognition of their service. It is typically calculated as a certain number of days' salary for each year of service. The specific calculation and amount of gratuity will vary depending on the company's policy and the local laws in the country or region where the company operates.
In India, the Gratuity Act, 1972, states that gratuity is calculated as follows:
An employee will be eligible for gratuity if he/she has completed at least five years of service with the employer.
The gratuity amount is calculated as follows: Last drawn salary (basic salary plus dearness allowance) x number of completed years of service x 15/26
In other countries, the calculation may be different and can be based on the laws of that country. Some countries have laws that set a maximum amount of gratuity an employee can receive, or a maximum number of years for which an employee can receive gratuity.
It's important to consult the company's policy or local laws to understand the specific calculation and eligibility criteria for gratuity.
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