🧮 Calculation Methods
Gratuity Calculation
A General Guide to End of Service Math
How is Gratuity Calculated?
Gratuity calculation generally depends on three main factors:
- Last Drawn Salary: Usually the Basic Salary component.
- Tenure: The number of years of service.
- Region/Law: The specific labor laws governing the employment contract (e.g., UAE Labor Law, Indian Gratuity Act).
Common Methods
1. The 21/30 Rule (UAE)
Common in the Gulf region. 21 days of basic pay for the first 5 years, and 30 days for subsequent years.
2. The 15/26 Rule (India)
Common in India. 15 days of wages for every completed year of service, calculated on a 26-day working month basis.