Gratuity Calculator
What is a Gratuity Calculator?
The Gratuity Calculator is an online tool that helps employees estimate the lump sum amount they will receive upon leaving a job after a continuous period of five or more years. Gratuity is governed by the Payment of Gratuity Act, 1972, and is calculated based on the last drawn salary and total years of service.
How to Calculate Gratuity?
The formula to calculate gratuity is:
Gratuity = (15 × Last Drawn Salary × Years of Service) / 26
Here, 15 days' salary is considered for each completed year of service, and 26 represents the number of working days in a month.
Who is Eligible for Gratuity?
- Employees with at least 5 years of continuous service.
- Employees working in an organization with 10 or more employees.
- Gratuity is payable upon resignation, retirement, termination (except in case of misconduct), or death (in which case, it's paid to the nominee).
Benefits of Using an Online Gratuity Calculator
- Quick and accurate estimation.
- Helps in retirement and financial planning.
- No need for manual calculation.
- Available 24/7 for free.
FAQs on Gratuity Calculator
Is gratuity taxable?
Gratuity received by government employees is fully tax-exempt. For private-sector employees, it is tax-exempt up to ₹20 lakh as per current tax laws.
Can I get gratuity if I resign before 5 years?
Generally, no. However, in certain cases like death or disability, gratuity may still be paid even if the 5-year condition isn't met.
Is gratuity applicable on contract employees?
If the employee is directly under the payroll and meets the 5-year criteria, they may be eligible for gratuity benefits.