1. #1
    Unregistered

    What is employer’s contribution to Gratuity and PF of employees?

    I have been working as an Accountant in a small organization. I want to go in a field of HR. In some of the interview they ask some question like employees contribution to PF and gratuity and policy of HR. I just want to know whether employers also contribute to gratuity and PF of employees. If yes, what is employer’s contribution to gratuity and PF of employees?

  2. #2
    Arjun Array
    Join Date
    Jul 2012
    Location
    turaaa
    Posts
    1,729

    Re: What is employer’s contribution to Gratuity and PF of employees?

    Dear, asker it varies from organisation to organisation. There is a general rule of PF deduction in the government sector a employee can contribute of his choice toward the Pf deduction as his own saving money. Generally about 12% from his salary are deducted for PF as the rule. But graudity is totally different it is not a contribution it is employee that for how long times he has been worked in the organisation. If he has full retirement then he eilgible for full graduity payment and if the employee is about 45 yrs of age and con't able to work then he can take an volunteer retirement but he is not eligible for full graduity. The payment of graduity act come in the year 1972.

  3. #3
    Ashutosh Tiwari Array
    Join Date
    Sep 2012
    Posts
    105

    Re: What is employer’s contribution to Gratuity and PF of employees?

    Dear friend,

    Yes, employer also contribute in EPF and Gratuity .
    Gratuity is paid by employer alone whereas EPF is contributed by both employee as well as employer.

    PF
    Contribution of employee - 12 % of basic salary per month.
    Contribution of employer - 13.61% of basic salary per month.

    Gratuity

    It is paid only to those employees who have completed 5 or more years of service in the same organization, In few cases of death and deceased it may be paid before the completion of 5 years too. Generally it is paid on retirement, resignation or superannuation.

    Formula for calculating gratuity is -

    Last drawn salary* No. of years of service *15/26
    If employee have completed 5 years and 6 months of services then the NO. of years of service would be taken as 6 years .

    All the best.

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