Who is eligible for gratuity in Zambia?

Who is entitled to gratuity?

An individual is eligible for gratuity if he/she fulfills the following criteria: The employee should be eligible for superannuation. He/she should have retired from the job. The individual must have resigned from the job after continuous employment with the organization for five years.

How is gratuity paid in Zambia?

The employer shall at the end of the fixed term contract pay an employee a severance pay in the form of gratuity at the rate of 25% or a retirement benefit provided by the relevant social security scheme and where a contract of fixed duration is terminated, gratuity shall be paid at a prorated rate.

What is non qualifying gratuity in Zambia?

Non-qualifying gratuity is added to the salary for the month in which it is paid and taxed with reference to the appropriate P.A.Y.E tax. Redundancy or Retrenchment. The following payments may be made to an employee who has either been declared redundant or has been retrenched: Salary.

Is severance the same as gratuity?


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Severance is paid when an employee is declared redundant. Gratuity is a lump sum amount that an employer pays an employee if he/she retires or resigns from employment. … On the other hand, severance is offered to an employee upon being laid off from a company.

Who are not eligible for gratuity?

No, individuals are not eligible for gratuity after completing 4.5 years. However, as per a ruling made by the Madras High Court, individuals who have completed 240 days in their fifth year of service are eligible for gratuity. The legal heir of an employee is eligible for gratuity if he/she dies during employment.

Who are not covered under gratuity Act?

In the case of the former, the entire gratuity amount received on retirement or death is exempt from income tax. In the case of private employees, they are divided as: Private employees covered under the Payment of Gratuity Act of 1972. Private employees not covered under the Payment of Gratuity Act of 1972.

Is gratuity mandatory in Zambia?

The employment act on Zambia explicitly states that an employer shall pay gratuity under the two following circumstances; At the end of a long-term contract period. When an employees contract is terminated where it shall be paid on a prorated basis.

Is PAYE refundable in Zambia?

PAYAs- YouEarn (PAYE) can only be refunded if there is a genuine mistake in the tax computation by the employer resulting in the employee being overtaxed, says the Zambia Revenue Authority (ZRA).

Do you get gratuity if you resign?

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.

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What is gratuity and how is it calculated?

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.

How is gratuity calculated?

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.

Can a company hold gratuity?

In the case of Chairman-cum-Managing Director, Mahanadi Coalfields Limited vs Sri Rabindranath Choube, the Hon’ble Apex Court has held that an employer can withhold gratuity of an employee during pendency of a disciplinary proceeding against such an employee provided the same was instituted while (s)he was in service …

How can I get gratuity after resignation?

Calculation of Gratuity

Total Gratuity Payable = (Last Drawn Monthly Salary) x (15/26) x (Number of years of service completed). For example, if you joined service in 2013 and resigned in 2018 with a monthly salary of Rs. 50,000 (in 2015), your gratuity will be calculated as follows: – (15/26* Rs. 50,000)*5 = Rs.

What should be included in a severance package?

Elements of a severance package that might be up for negotiation:

  • Amount of severance pay.
  • How severance is paid (installments or lump sum)
  • Coverage of healthcare plan costs.
  • Exact date of termination.
  • Vesting in a retirement plan or stock options.
  • Outplacement or job-training services.
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