# What is the rule for gratuity?

Table of Contents

## What is the rule for gratuity?

Organisations with a workforce of 10 employees on a single day in the preceding 12 months are liable to pay gratuity. If the number of employees of the same organisation reduces to under 10, it will still have to pay the gratuity, as per regulations of the Act.

How is gratuity calculated in Labour law?

The calculation for this is: Gratuity = Average salary (basic + DA) * ½ * Number of service years. In this case, the service years are not rounded off to the next number. So if you have a service of 12 years and 10 months, you get gratuity for 12 years and not 13 years.

### How is gratuity calculated in Pakistan?

What is the rate of gratuity and how is it calculated? In accordance with the provisions of law, the rate of gratuity is “thirty (30) days wages for every completed year of service or any period in excess of six months”. Any employment period exceeding six months will be considered as one year.

What is gratuity Fund in Pakistan?

Gratuity is one of the retirement benefits for long service. Before May 1972, the payment of gratuity by the employer was on a voluntary basis, after that it was incorporated in Standing Orders and becomes a statutory obligation of employers. Since then payment of gratuity is a legal benefit of the eligible worker.

## How is 2020 gratuity calculated?

The formula is: (15 * Your last drawn salary * the working tenure) / 30. For example, you have a basic salary of Rs 30,000. You have rendered continuous service of 7 years and the employer is not covered under the Gratuity Act. Gratuity Amount = (15 * 30,000 * 7) / 30 = Rs 1,05,000.

Where do I complain if gratuity is not paid?

If the amount of gratuity is not paid by the employer within the prescribed time to the said person, he/she has the right to file a complaint to the Controlling Authority under the Payment of Gratuity Act within the area where the employer’s establishment is situated.

### Is it mandatory for employer to pay gratuity?

As per the government laws, it is mandatory for employers to pay the amount of gratuity within 30 days. However, if there is a delay in the payment of the gratuity, then the employer has to pay simple interest on this amount from the due date till the date of payment.

Can my employer hold my gratuity?

Right to forfeit gratuity of employee by the employer not absolute but only when the employee has been dismissed for the misconduct as specified in section 4(6) of the payment of Gratuity Act. Even such forfeiture can be taken-up only after giving an opportunity to the concerned employee, issuing a show-cause notice.

## Is payment of gratuity mandatory?

Can I get gratuity if terminated?

4(6)(a) of the Act which provides that the gratuity of an employee, whose services may have been terminated for the reasons as specified therein, can be forfeited to the extent of damage or loss so caused.