Payment of gratuity
As per Gratuity act, wages means Basic Salary + DA.
I want to include other allowances also in calculation of gratuity. It will be in addition to Basic + DA
Is it possible...?
As per Gratuity act only last basic pay of the employee + DA. no other additions.
As per Payment of Gratuity Act 1972 only Basic + DA is taken for computing the Gratuity amount. Other allowances House Rent allowance, commission, Bonus, over time etc are not considered for calculating Gratuity.
Yes of course you are suppose to take the 'Other Allowance' for the purpose of calculating Gratuity under the Payment of Gratuity Act. As there is no such term called 'Other Allowance', however if the employer is mentioning this very allowance in the payslip, the amount under the head 'Other Allowance' will have to be taken into consideration. Nevertheless we should not forget that the 'Other Allowance' is a part of the "Basic" itself.
All the above stated is applicable if the 'Other Allowance' is provided to all employees in the normal courses and do not depend upon any contingencies to get qualified under the term " Basic".
Gratuity calculation will be last drawn basic * 15/26 * no. of years of service.