### What is Gratuity?

A gratuity is a sum of money customarily given by a customer to certain service sector workers such as hospitality for the service they have performed,

in addition to the basic price of the service.

### How To Calculate Gratuity In Uganda

**Below is the formula for calculating gratuity in Uganda**

The formula is: (15 * Your last drawn salary * the working tenure) / 30. For example, you have a basic salary of UGX 1421955.11.

You have rendered continuous service of 7 years and the employer is not covered under the Gratuity Act. Gratuity Amount = (15 * 1421955.11 * 7) / 30 = UGX 4976842.88.

### How is gratuity benefit calculated?

The last drawn salary is divided by 26 and then multiplied by 15 to get the gratuity per year. The basic component of the last drawn salary is taken into account.

Also, for government employees, dearness allowance is accounted for.

### What Is The New Rule Of Gratuity In Uganda?

As part of gratuity, for an employee’s every year of service, the organization will have to pay an amount which is equivalent to 15 days of his salary which he has last drawn.

Here, salary is the sum of basic wages and dearness allowance