Employee benefits offered to working individuals in India make them feel considered. Employees not just get a feeling of security but also an increased value from their work. Now, there are a number of employee benefits that are available for Indian employees to support their families and future requirements. One such benefit is gratuity.
Gratuity is one of the most well-known and advantageous benefits in India. Yet, many people do not know about it. If you are one of them, this blog is meant for you.
In this blog, we will tell you everything related to gratuity, from the gratuity calculator, its eligibility to its benefits. So, without any further ado, let’s start with its definition.
The Payment of Gratuity Act has mandated gratuity as an employee benefit. As per this act, every working individual is obliged to acquire a lump-sum payment of fifteen days for every year of employment.
Who Can Avail It?
If a working individual has obliged with the conditions listed below, s/he will be entitled to this benefit:
- S/he should be eligible for superannuation.
- S/he should have resigned from the organization after working for a total of 5 years.
- S/he should not have shown any misbehavior or misconduct during the service period
- If s/he suffers any disability after any prolonged illness, accident, or if the individual dies, the named nominee can acquire the payment.
How To Calculate It?
For people who think that calculating gratuity is complicated, let us tell you it is not true.
You can easily calculate your gratuity amount by this formulae:
Here, N stands for the total years employee worked in the organization
C stands for the last withdrawn salary of the employee
Doesn’t the calculation process seem easy now?
Now, we are living in a digital time where everything is fast. That being said, if you want your gratuity calculation easier and quicker, rely on an online gratuity calculator on the internet. Using such a calculator, one can calculate the gratuity amount in just a matter of minutes.
Why Should Companies Consider This Benefit?
So, here are some reasons why every organization should consider gratuity:
Improves Retention Strategy
Offering gratuity to employees can, undoubtedly, help companies in retaining their best talents. When employees will feel that their company cares for their needs, they will automatically stay with the company for a longer time.
Promotes Employee Loyalty
Another advantage of offering gratuity or any other benefits to your people is that it can enhance the overall employee experience and loyalty. If a company offers gratuity benefits to its employees, the probability of them searching for other jobs will considerably reduce. They will certainly consider staying and working for the company in the long run.
Boosts Productivity Levels
Financial stress is one of the most common worries of every working individual out there. This not just impacts their personal life but also drops down their efficiency levels in the workplace. Now, when companies offer benefits like a gratuity to their employees, they will have less financial stress that in turn will allow them to put their best foot forward along the way.
When it comes to working individuals, benefits are as important as their salary. Hence, if a company offers useful benefits such as PF and gratuity, it will pave the way for attracting more people towards it.
Maintain Mental Wellbeing
When employees know that they will get a lump-sum amount after five years of hard work, it will naturally give them peace of mind.
That’s it, we have come to the conclusion that gratuity is one of the most crucial employee benefits that every company, as well as an employee, should consider.
Hope this blog helped you to know everything about gratuity. Now that you have a clear understanding of this crucial benefit, from its eligibility, advantages to the meaning of the gratuity calculator, it is time for you to share these learnings with your colleagues.