Gratuity Calculator
Estimate your gratuity amount based on the latest Payment of Gratuity Act norms.
Estimated Gratuity
₹0
Effective Tenure
15 Years
Act Status
COVERED
Important Rules:
- • Service Period: Minimum 5 years of continuous service is usually required.
- • Maximum Limit: As per the Act, Gratuity cannot exceed ₹20 Lakh.
- • Rounding: For covered organizations, service > 6 months is rounded to the next year.
What is a Gratuity Calculator?
A Gratuity Calculator is a specialized tool that helps employees estimate the amount they are entitled to receive from their employer upon leaving the organization after a specific period of service. Gratuity is a statutory benefit paid to employees who have completed at least five years of continuous service.
In India, gratuity payments are governed by the Payment of Gratuity Act, 1972, which ensures that employees receive a lump sum as a token of appreciation for their long-term association with the company.
How to Use the Gratuity Calculator?
- Step 1: Select whether your organization is covered under the Gratuity Act.
- Step 2: Enter your "Last Drawn Salary" (Basic + Dearness Allowance).
- Step 3: Input your total years and months of continuous service.
- Result: The calculator instantly provides an estimate of your gratuity amount.
Benefits of Gratuity
- Retirement Security: Provides a significant lump sum for post-retirement life.
- Tax Benefits: Gratuity received up to ₹20 Lakh is tax-exempt for many employees.
- Reward for Loyalty: Encourages long-term commitment to an organization.
- Financial Cushion: Acts as a financial safety net during job transitions.
Gratuity Calculation Formula
The calculation depends on whether the employer is covered under the Payment of Gratuity Act:
For Covered Organizations:
Gratuity = (15 × Last Salary × Tenure) / 26* Note: For non-covered organizations, the denominator is 30 instead of 26.