How is gratuity paid in Zambia?

An employer shall at the end of a long-term contract period, pay an employee gratuity at a rate of not less than 25% of the employee’s basic pay earned during the period of the contract.

How do I pay my employer gratuity?

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.

Who is eligible for gratuity in Zambia?

Vulnerable workers who earn very little compared to other workers in Zambia should have the compulsory gratuity benefit of 25% of the salary they earned during their employment if they have worked for 10 or more years.

What percentage is gratuity calculated?

Ans: An employee can receive a maximum of 57.69% of the monthly salary as gratuity. To know the exact amount of gratuity, you can use the Gratuity calculator.

Is gratuity calculated on basic salary?

The gratuity amount depends upon the tenure of service and last drawn salary. Gratuity Calculation Formula=Number of completed years of service (n)*basic salary last drawn plus dearness allowance (b)*15/26. One can calculate his/her gratuity amount with the help of the following formula: Gratuity = n*b*15/26.

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What is the new rule for gratuity?

In case of gratuity, for each year of service, the organization has to pay an amount equalling 15 days of last-drawn salary. Salary here is considered basic wages plus dearness allowance.

What is a gratuity payment?

a gratuity or ‘golden handshake’ an amount of a genuine redundancy or early retirement scheme payment in excess of the tax free component. a payment because of termination due to an employee’s invalidity (other than compensation for personal injury)

Who is entitled to gratuity?

Under the Payment of Gratuity Act, 1972, an employee who has worked in a company for over five years is eligible for gratuity by his/her employer.

Who qualifies for gratuity?

The Payment of Gratuity Act, 1972, states that an employee is eligible to get gratuity only after he or she has worked with an organization for at least five years. The employee stands to receive the gratuity amount on his or her superannuation, or at the time of retirement or resignation.

What percentage is gratuity of basic salary?

As per the The Payment of Gratuity Act, 1972,Gratuity is calculated as 4.81% of your basic pay.

What is gratuity amount deducted from salary?

Companies usually deduct 4.81% of your basic plus dearness allowance towards gratuity payment. This 4.81% is computed as (15/26)/12. Effectively, it is half a month’s salary on a base of a year’s salary.”

What is 26 gratuity calculation?

For calculating the per day wage of the employee, the monthly wage (last drawn Basic + Dearness Allowance) is divided by 26 and the result is multiplied by 15 x the number of years of service; i.e. Gratuity = (Basic + DA) x 15/26 x number of years.

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Is gratuity amount taxable?

The exemption for gratuity from tax is covered under Sec 10(10) of income tax Act 1961. Any Gratuity received during service is fully taxable.

How is gratuity calculated?


  1. Basic salary ÷ 30 = Daily wage.
  2. Daily wage x 21 = 1 year gratuity figure (Or x30 if applicable)
  3. 1 year gratuity figure x years of service = Total gratuity owed. …
  4. Total gratuity owed ÷ 3 = One third (1/3) of total gratuity.
  5. Either take this figure (between 1 and 3 years) or multiply it by two (between 3 and 5 years)


How is 2020 gratuity calculated?

Gratuity Calculation 2020 – Example. … Gratuity = Last drawn salary * 15/26 * No. of completed years of service. In this case, the gratuity amount will be as Rs 26000 x 15/26 x 10 years= Rs.

How is gratuity calculated online?

The formula for gratuity is: Gratuity (G) = n*b*15/26. where, n = The number of completed years in the current organization. b = the Last salary drawn or basic pay (plus dearness allowance, the commission received on sales, if any).

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