Questions & Answers
The basis of calculating the EOSB
Hi Madam,
One clarification:
21 calendar days’ basic pay for each year of the first five years of service.
30 calendar days’ basic pay for each additional year.
Provided that the entire total remuneration does not exceed two years pay.
Is it 24 months X Basic Pay or 24 months X Gross Pay?
Dear Questioner,
Your question itself comprises the answer.
The end of service gratuity is calculated on the basis of the last wage which the employee was entitled to, namely the basic salary. Hence, it will not include allowances such as housing, conveyance, utilities, furniture...etc.
Please refer Article 134 of the Employment Law which reads as follows.
"Without prejudice to the provisions of certain laws on the pensions and retirement benefits granted to workers in certain establishments, end of service gratuity shall be calculated on the basis of the last wage due to monthly, weekly and daily paid workers, and on the basis of the average daily wage set forth in Article 57 hereof for the workers getting paid by piece. The wage used as a basis for calculating the end of service gratuity shall not include payments made to the worker in housing, transport and travel allowance, overtime pay, representation allowance, cashier's allowances, children education allowance, allowances for recreational and social services, and any other bonuses or allowances."
If you any need further assistance, please feel free to contact me.
Thank you.
Regards,
Rajasree Ravivarma
0544461746
cloudsdarker@gmail.com
