Payment of Gratuity in case of death of an employee

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What is the calculation for Gratuity, as per the Gratuity Act in case of the death of an employee?

What are the government rules to find out the benefit payable to the nominee in this case?

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Asked on October 2, 2019 7:19 am
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The Gratuity on death doesn't follow the same formula which applies to retirement.

In this case, the applicable amount also depends on the length of service in the government department.

Here the calculation is based on the Basic Pay of the employees whereas in the retirement gratuity is calculated on monthly salary (Basic Pay plus DA).

Gratuity Calculation on Death of Employee

Qualifying Service (Completed Years of Service) Payment Rate
Less than One year 2 X BP
One year or more but less than 5 (Five) years 6 X BP
5 (Five) or more but less than 11 (Eleven ) years 12 X BP
11 (Eleven ) or more but less than 20 (Twenty) years 20 X BP
20  (Twenty) years or more Half of the emoluments for every completed 6 monthly periods of qualifying service subject to a maximum of 33 times of emoluments.

Where: BP = Basic Pay

You will get the Basic Pay in the salary statement (Payslip)

In this case, too, the ceiling for the Gratuity is limited to 20 Lakhs from 1st January 2016.

In this case, too, the ceiling for the Gratuity is limited to 20 Lakhs from 1st January 2016.

Source of Information: GoI

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Answered on October 2, 2019 8:27 am

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