Graduity Calculator
Gratuity Calculator
Introduction
The Gratuity Calculator shows how much gratuity amount you'll receive from your employer upon leaving a job or retiring — calculated as per India's Payment of Gratuity Act.
How to Use
- Enter your Years of Service
- Enter your Last Drawn Salary (Basic + DA)
- Click "Calculate" — the total gratuity amount displays instantly
Formula Explanation
Gratuity = (Last Drawn Salary × 15 × Years of Service) / 26
(26 working days per month is assumed in this calculation)
Worked Example
For an employee with a last drawn salary of ₹40,000 and 10 years of service, gratuity would be (40,000 × 15 × 10) / 26 = approximately ₹2,30,769.
Practical Context
Under India's Payment of Gratuity Act, 1972, an employee becomes eligible for gratuity after completing 5 years of continuous service. This benefit is mandatory in organizations with 10+ employees. The current tax-exempt gratuity limit is ₹20 lakh for both government and private sector employees (subject to certain conditions).
Frequently Asked Questions
Q1: What is the minimum service period required for gratuity?
Generally, a minimum of 5 years of continuous service is required for gratuity eligibility (with some exceptions for death/disability cases).
Q2: Is gratuity taxable?
Gratuity up to ₹20 lakh is tax-exempt; amounts above this may be taxable depending on employee category (government vs. private).
Q3: Does HRA or other allowances count in gratuity calculation?
No, gratuity calculation is based only on Basic Salary + Dearness Allowance (DA), excluding other allowances.
Q4: Can gratuity be paid before 5 years in special circumstances?
Yes, the 5-year rule is waived in cases of death or disability of the employee, where gratuity becomes payable regardless of service duration.
Q5: Is gratuity mandatory for all companies?
It's mandatory for establishments with 10 or more employees under the Payment of Gratuity Act; smaller organizations aren't legally required to provide it, though some do voluntarily.