5 Important Ways for Calculating the Amount of Gratuity

2. Rate of Gratuity ‘ Piece-rate Employee:

If the employee is a piece-rated employee, daily wages shall be computed on the average of total wages received by him for a period of three months immediately preceding the termination of his employment and for this purpose, wages paid to him for any overtime work shall not be taken into account. [Proviso 1 to Sec. 4 (2)]

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3. Rate of Gratuity for Employees in Seasonal Establishments:

In the case of employees employed in seasonal establishments, and who is not so employed throughout the year, the gratuity payable to him shall be at the rate of 7 days wages for each season.

4. Maximum Amount of Gratuity:

The amount of gratuity payable to an employee shall not exceed Rs. 3, 50,000.

5. Better Terms of Gratuity [Sec. 4 (5)]:

An employee may sometimes be entitled to receive better terms of gratuity under any award or agreement or contract with the employer. In such a case, nothing in Sec. 4 shall affect the right of the employee to receive better terms. [Sec. 4(5)]

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