Free online gratuity calculator to calculate your gratuity amount as per Payment of Gratuity Act 1972. Know eligibility, formula, tax treatment, and maximum limits.
Enter your details in the form to calculate your gratuity amount.
Gratuity is a retirement benefit paid by employers to employees who have completed at least 5 years of continuous service.
For employees covered under Gratuity Act:
For employees NOT covered under Gratuity Act:
Where Last Drawn Salary = Basic Salary + Dearness Allowance (DA)
Gratuity is an important retirement benefit that every employee in India should understand. It's a lump sum payment made by an employer to an employee as a token of appreciation for the services rendered. The Payment of Gratuity Act, 1972 governs the gratuity payment in India for organizations employing 10 or more persons.
The gratuity calculation depends on whether the employee is covered under the Gratuity Act or not:
For employees covered under Gratuity Act:
Gratuity = (15/26) × Last Drawn Salary × Years of Service
Where Last Drawn Salary = Basic Salary + Dearness Allowance (DA)
For employees NOT covered under Gratuity Act:
Gratuity = (15/30) × Last Drawn Salary × Years of Service
Where Last Drawn Salary = Basic Salary + Dearness Allowance (DA)
Let's understand with an example: An employee with a basic salary + DA of ₹50,000 who has worked for 10 years in an organization covered under the Gratuity Act.
Calculation: (15/26) × ₹50,000 × 10 = ₹2,88,461.54
This employee would receive approximately ₹2.88 lakhs as gratuity.
Pro Tip: Always verify your employment type and organization's coverage under the Gratuity Act before calculating your gratuity. If you're not covered under the Act, check your employment contract for specific gratuity terms.
Using our online gratuity calculator ensures you get an accurate estimate of your gratuity amount, helping you plan your retirement finances better. Remember that while this calculator provides a reliable estimate, the actual amount may vary based on specific employment terms and conditions.