Gratuity Calculator
Calculate your gratuity amount based on last drawn salary and years of service as per the Payment of Gratuity Act, 1972.
Gratuity Calculator – Calculate Gratuity Amount Easily
A Gratuity Calculator helps employees estimate the gratuity amount they may receive from their employer after completing a minimum period of continuous service.
Gratuity is a statutory benefit paid by employers under the Payment of Gratuity Act, 1972, to eligible employees as a reward for long-term service. The amount depends on factors such as basic salary, years of service, and eligibility rules.
What Is a Gratuity Calculator?
A Gratuity Calculator is an online tool that estimates the gratuity payable to an employee based on standard gratuity calculation formulas.
- Estimated gratuity amount
- Impact of years of service on gratuity
- Basic salary considered for calculation
This calculator provides indicative results based on commonly used gratuity calculation rules applicable in India. Actual gratuity paid may vary based on company policy and legal interpretation.
How Does the Gratuity Calculator Work?
The gratuity amount is calculated using the standard formula:
- (Last drawn basic salary + DA) × 15 × Years of service ÷ 26
Note: The calculator assumes eligibility under the Payment of Gratuity Act and does not account for employer-specific policies.
Gratuity Calculation Example
Let’s understand how gratuity is calculated using a simple example.
- Last Drawn Basic Salary + DA: ₹40,000 per month
- Years of Service: 10 years
Gratuity is calculated as:
- ₹40,000 × 15 × 10 ÷ 26
Gratuity Amount: ₹2,30,769 (approx.)
Result: Based on the above details, the employee may be eligible to receive approximately ₹2.3 lakh as gratuity.
Frequently Asked Questions (FAQs)
What is gratuity?
Gratuity is a lump sum amount paid by an employer to an employee as a reward for long-term service, usually at the time of resignation, retirement, or termination.
Who is eligible for gratuity?
Employees who have completed at least five years of continuous service with an employer are generally eligible for gratuity under the Payment of Gratuity Act.
Is gratuity payable if I resign?
Yes. If you resign after completing the minimum service period, you are eligible to receive gratuity.
Does gratuity include allowances?
No. Gratuity is calculated only on basic salary and dearness allowance (DA), not on other allowances or bonuses.
Is gratuity taxable?
Gratuity may be partially or fully exempt from income tax, subject to limits prescribed under income tax laws. Tax treatment may vary based on employment type.
Is the gratuity amount capped?
Yes. Under current rules, the maximum tax-exempt gratuity amount is subject to a prescribed limit, which may change as per government notification.
Is this Gratuity Calculator accurate?
The calculator provides an estimate based on standard rules. Actual gratuity payable may differ based on employer policy and applicable laws.