Frequently asked questions
You can calculate the gratuity using the formula gratuity = (15 × last drawn salary × working tenure)/30. You can also save time and use the Bajaj Finance gratuity calculator to know the final gratuity value due to you.
As per the new rule of gratuity, every year of service, an employee is entitled to 15 days of pay as gratuity. The company is required to pay an amount equal to 15 days of the employee's most recent wage as part of the gratuity for each year of service.
For gratuities, employees must have at least five years of service: Those who have worked for the company for five years are entitled for gratuities. The requirement does not, however, apply when an employee passes away or becomes disabled.
The gratuity Act of 1972 states that a worker can only get the loyalty incentive after five years of regular employment. The highest gratuity that can be given to a worker is Rs. 20 lakh. The gratuity becomes taxed if it exceeds the previously mentioned cap. Any gratuity paid by private employees who are not covered by the Payment of Gratuity Act of 1972 is tax-exempt up to the least of the following amounts: legal maximum of Rs. 20 lakh. Gratuity is equal to the average wage times the number of years of service. Actual tip money was given.
Within 30 days of the employer receiving the application form, the gratuity sum must be paid. If the employer misses the deadline, he is responsible for paying the gratuity amount plus simple interest.
Indian firms might be obliged to set up a separate fund to pay employee gratuities to safeguard employee retirement money from being lost in corporate bankruptcies. In a recent report that was given to the finance ministry following research that the government had commissioned, this proposal was made. Even if your employer files for bankruptcy, the gratuity sum would still be due. The amount of the gratuity cannot be suspended by a court order.
Most of the time, gratuity money represents your life savings because it is acquired at the time of retirement or changing jobs. You could make more money if you put money into a gratuity fund. You might be hesitant to put them in high-risk ventures, though.
If you invest gratuity money in a Bajaj Finance Fixed Deposit (FD), you will receive higher FD rates of up to 8.60% p.a. It is interesting to note that your money will also be secure because one of the safest investment alternatives is a fixed deposit. Additionally, Bajaj Finance Fixed Deposits enjoy a [ICRA]AAA(Stable), indicating the highest level of safety and lowest investment risk. BFL FD have also a rating of CRISIL AAA/ STABLE, which is another reason to invest.
You can use the FD calculator to determine how much interest you can earn by investing your gratuity amount in fixed deposit.
If you've worked for 4.5 years, you may not be eligible for gratuity, as typically, a minimum of 5 years of continuous service is required.
Contract employees are eligible for gratuity if they complete 5 years of continuous service with the same contractor, as per the Payment of Gratuity Act.
The gratuity amount calculated is an estimate only and is computed based on the information provided by you. Therefore, the actual amount may be slightly different.