ap7am logo
Logo Bar bseindia nse-india msn yahoo youtube facebook google thehindu bbc ndtv v6 ABN NTv Tv9 etv namasthetelangaana sakshi andhrajyothy eenadu ap7am bhakti espncricinfo wikipedia twitter

Quitting your job?...Must take these benefits

Thu, Aug 31, 2017, 02:51 PM
Related Image

Companies have to make cash payments to any employee, who is retiring or quitting the job on his own, or to his family, in the case of his sudden demise while in service. It is useful for every employee to know about these benefits. Many companies however, try to avoid giving these benefits. It is necessary therefore to know about them.


Gratuity
This is given in a single installment. It is a gratitude shown by the company, towards the employee, for lending his services up till then. It should be granted by the company, in case the employee retires or even if he resigns on his own.

Rules
Any company with 10 or more employees, must give gratuity, as a rule. It could be a factory or a firm. If it has more than 10 employees, it must pay gratuity. A company with fewer employees is not made responsible. It should have employed at least 10 persons for a whole year. Even social welfare organisations, hospitals and educational institutions come under this regulation. An employee too should work for at least five years, without a break, in the same company, to win this benefit. If gratuity is given in the prescribed formula, tax is deducted on it. No court can stop this payment. If a worker creates losses for a company, then this is confiscated. If an employee is removed from services for ill-discipline or violent acts, or for unethical practices, the company need not pay gratuity.

representational imageFive years service
At least 240 working days are considered as one year. If any employee resigns after working for four years and eight months, he will get gratuity. If he works for five years, seven months, it is rounded off to six years. Similarly, if he works for five years and five months, it is rounded off to just five years. Even strike, layoff or lockout will not be counted. Any break in service, due to no fault of the employee, will also not be counted as hurdle.

In particular times
Employees are eligible for gratuity, even if they resign to join some other job or retire. It is not any amount paid to the employee, who is still continuing with same organisation, even after five years. It will be given only after he leaves the organisation, after five years of service.

Death, disability
If an employee dies in service or is disabled for any reason, even if he has not completed five years of service, gratuity is paid to him. His nominee or legal heir will get the sum.

Taxes
Gratuity that is granted as per the formula suggested by the government, is totally exempt from tax. It is not necessary that the company pay according to the formula. It might give more if it thinks the employee deserves this. However, the additional amount that is paid, over and above the prescribed percentage, is taxable. The maximum amount that is exempt from tax is Rs. 10,00,000.

representational imageFormula for paying gratuity
Wages of 15 days in a year is paid as gratuity. Wages are basic pay plus Dearness Allowance (DA). The last basic pay and DA are taken in to consideration. A month is calculated as 26 days, because there is a day's off in a week. At least 57.69 per cent of a month's wages is paid as gratuity in a year. In the case of daily wagers, three months of wages is calculated as one day's wages and gratuity is granted accordingly. This is the reason why, generally, in private companies, the basic pay of employees is shown as very less. Companies show basic pay and DA as less, so that the gratuity too will be less. Wages is shown as more in other categories, like HRA and allowances. If you want to calculate gratuity, add your basic pay and DA. This is considered as one month's pay. Note how many years you have worked in the organisation. Pay*years in service*15/26 -- this formula works out the gratuity that could you could earn.

Company is in loss
Gratuity has to be given, even if the company is at a loss, according to rules. As per company rules, an employee has to give one to three months of prior notice, in case he wants to quit. Once the notice is given, the company has to pay the gratuity, even if the employee does not work in notice period, but is otherwise deserving.

Encashment leave
An employee, who resigns, is also eligible for leave encashment as per service laws. An employee is eligible for a certain number of days of Earned Leaves (ELs) per month. He can use them in the same year. The unused leave should be paid in cash. If they are not used or paid for, ELs can be commuted to the next year. Such collected ELs of an employee have to paid back in cash by the company, when he retires or quits the job. While government employees are enjoying this facility, many private companies are not paying ELs.

Must take Form. 16
Companies give Form 16 (wages/salary certificate) to their employees, annually. These should be carefully preserved. These can be produced as proofs, in case of Income Tax (IT) queries. Also, when an employee leaves one company and joins another in the middle of a financial year, he must inform the new company about the last salary that he got. Or the Form 16 given by the last company can be submitted.

representational imageMedical insurance
Employees of some companies have Group Health Insurance. Some insurance companies are coming forward to change the group medical insurance claims to individual claims, for an employee who is resigning from the company. Find out if this facility is available and it can be chosen if it is worth it.

Salary accounts
There is no need for maintaining minimum balance in salary account. But the banks will consider it like a private, individual account, once an employee resigns and no salary is being credited in the account. Then the minimum balance has to be maintained.
X

Feedback Form

Your IP address: 54.82.57.154
A Drone Saves Two Swimmers in Australia-Exclusive video..
A Drone Saves Two Swimmers in Australia-Exclusive video
Republic TV Survey on AP and Telangana; bright chances fo..
Republic TV Survey on AP and Telangana; bright chances for YSRCP in AP
Attack on Kathi Mahesh- OU JAC Leader Warangal Ravi slams ..
Attack on Kathi Mahesh- OU JAC Leader Warangal Ravi slams Pawan Kalyan
Kathi Mahesh shoots questions to Pawan Kalyan after he was..
Kathi Mahesh shoots questions to Pawan Kalyan after he was attacked by mob in Hyderabad
Actress Devayani’s father passes away..
Actress Devayani’s father passes away
Motkupalli to join TRS; gets assurance of Rajya Sabha seat..
Motkupalli to join TRS; gets assurance of Rajya Sabha seat?
Sailaja Case: Husband Rajesh clears potency test; gets ba..
Sailaja Case: Husband Rajesh clears potency test; gets bail
Prof.K Nageshwar analysis on TTDP's future after Motkupall..
Prof.K Nageshwar analysis on TTDP's future after Motkupally's remarks
Pawan Kalyan fans attack a fan after slipper shot at Pawan..
Pawan Kalyan fans attack a fan after slipper shot at Pawan's Agnyaathavaasi poster
'I want to commit suicide': Differently abled Vasundhara K..
'I want to commit suicide': Differently abled Vasundhara Koppula responds to Kathi & PK issue
Attack on Kathi Mahesh: Kathi demands apology from Pawan K..
Attack on Kathi Mahesh: Kathi demands apology from Pawan Kalyan
Kathi Mahesh Interview after Pawan Kalyan fans attack..
Kathi Mahesh Interview after Pawan Kalyan fans attack
Kathi Vs PK : Ramky's new allegations on Kathi Mahesh - Fu..
Kathi Vs PK : Ramky's new allegations on Kathi Mahesh - Full Video
I would have sent messages to girls: Kathi Mahesh accepts..
I would have sent messages to girls: Kathi Mahesh accepts in Tv9 debate
Pawan Kalyan Fans Attack Kathi Mahesh..
Pawan Kalyan Fans Attack Kathi Mahesh
Female Employee Files Sexual Harrassment case on Company M..
Female Employee Files Sexual Harrassment case on Company MD in Hyderabad
Face to Face with Rajdeep Sardesai who is Awestruck by CM..
Face to Face with Rajdeep Sardesai who is Awestruck by CM KCR
Director Trivikram Srinivas along with family Visits Tirum..
Director Trivikram Srinivas along with family Visits Tirumala
Ram Gopal Varma's counter to Social Activist Sandhya..
Ram Gopal Varma's counter to Social Activist Sandhya
Tammareddy Bharadwaj Reveals NTR's Personal Life SECRETS..
Tammareddy Bharadwaj Reveals NTR's Personal Life SECRETS