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 Zambia
Section 73 of the ECA provides for payment of gratuity at the end of a long-term contract. It provides that
the rate of gratuity to be paid should not be less than 25% of the employee’s basic pay earned during the contract period.
What is the simple formula for gratuity?
Even if the organization is not covered under the Gratuity Act, the employees would still receive the Gratuity amount.
But the number of days will be changed from 26 to 30 days. The Gratuity calculation formula is Gratuity = (15 × last drawn salary × working tenure)/30.
Is calculating gratuity monthly or yearly in Zambia?
For employees whose employer is not covered under the Gratuity Act, the gratuity amount would be
calculated as per the half-month salary on each completed year of service.
When was gratuity made mandatory in Zambia?
In 2019, the Zambian Parliament introduced the Employment Code Act which provides that gratuity is a benefit for all workers in Zambia who serve on fixed-term
(as opposed to permanent contracts) – therefore all workers who have a contract that has an end or expiry date are entitled to gratuity.