Calculate gratuity amount for employees not covered under Gratuity Act?


How to calculate gratuity amount for employees Not covered under Gratuity Act?


=((basic+da)15/26)/365Number of days.


=((basic+da)15/26)/365 x Number of day

If the employee is not covered under Gratuity Act, You need not pay it.
Thank you.

There is no law that restricts an employer from paying gratuity to his employees, even if the organization is not covered under the Payment of Gratuity Act. The amount of gratuity payable to the employee can be calculated based on half month’s salary for each completed year.

Calculation of amount of gratuity exempted from tax

The least of the following are exempt from tax:

  • Last 10 month’s average salary (basic + DA)* number of years of employment* 1/2;
  • Rs. 10 lakhs (the hike to Rs 20 lakhs is not applicable for employees not covered under the Payment of Gratuity Act)
  • Gratuity actually received
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