Often when we change jobs or decide to leave, the first question that comes to our mind is “Will I get gratuity money?” The rules so far have disappointed lakhs of employees. The reason was the strict condition of 5 years, which was not within everyone’s power to fulfill in today’s dynamic job market. But now the direction of the wind has changed. The new labor code has changed the old system. Now the long wait of five years can end and you can become eligible for gratuity even after working for just one year. In such a situation, the question is that if your basic salary is Rs 30,000, then how much money will you get in your hand after one year?
Big relief for employees
According to the old rules, to get gratuity, it was mandatory to work continuously for 5 years in the same company. Because of this rule, young people working in the private sector, who changed jobs quickly for better opportunities, often lost a large part of their savings. But the proposals for the New Labor Code have changed the whole picture.
Under the new provisions, the time limit for eligibility for gratuity has now been reduced to 1 year. That is, if you have worked continuously for one year in an organization, then you become entitled to gratuity. However, there is one thing to keep in mind here..’Continuity’. If you have taken long leave without pay (Loss of Pay) or had a large gap during this one year, it may affect your eligibility. Therefore, continuity of service is the key to this new rule.
How is the gratuity amount decided?
The government has fixed a standard formula for gratuity calculation, which is very easy to understand. Often people make the mistake of calculating their ‘In-hand Salary’ or ‘CTC’, whereas gratuity is always calculated on your Basic Salary and Dearness Allowance (DA).
Formula: (Last Basic Salary + DA) × (15/26) × (Total Years of Service)
Two numbers are very special in this formula, 15 and 26.
- 15- Because for every year you are given 15 days salary as reward.
- 26 – There are an average of 30 days in a month, but 4 Sunday holidays are removed. Therefore working days are considered 26.
How much money will you get on a salary of Rs 30,000?
Suppose you work in a company and your last basic salary is Rs 30,000. Under the new rules you have completed 1 year there. Now let’s see how much money will come into your pocket.
- Last Basic Salary: ₹30,000
- Years of Service: 1
- Calculation: 30,000 × (15/26) × 1
This amount will come to around Rs 17,307 (approximately Rs 17,300). This simply means that till now the employees who were left empty handed even after working for 4 years and 11 months, will now be able to take home a good amount of money even after working for just one year.
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