Gratuity Estimate
Estimated Gratuity Amount
₹0
Minimum 5 years of service is required to be eligible for gratuity.
Gratuity Calculator
Gratuity is a lump sum amount paid by an employer to an employee as a token of appreciation for their long-term service. As per the Payment of Gratuity Act, 1972, an employee is eligible for gratuity only if they have completed a minimum of 5 continuous years of service with the same organization.
How is Gratuity calculated?
The gratuity calculation depends on the last drawn salary and the total number of years served. The salary component considered for gratuity is Basic Salary + Dearness Allowance (DA).
Gratuity = (15 / 26) * Last Drawn Salary * Years of Service
Note:
- 15 represents 15 days of wages for every completed year of service.
- 26 represents the number of working days in a month.
Example:
If your last drawn Basic Salary + DA is ₹50,000 and you have worked at the company for 7 years and 8 months (rounded to 8 years):
Gratuity = (15 / 26) * 50,000 * 8 = ₹2,30,769
Important Rules
- Eligibility: Minimum 5 years of continuous service is mandatory (except in cases of death or disablement).
- Rounding: Service duration of more than 6 months in the last year is counted as a full year (e.g., 5 years 7 months = 6 years).
- Tax Exemption: Gratuity received up to ₹20 Lakhs is completely tax-exempt for covered employees.